Problem 13-10 Returns and Standard Deviations [LO1]

Consider the following information:

				Rate of Return If State Occurs
State of	Probability of
Economy	State of Economy			Stock A			Stock B			Stock C
Boom		.15			.36			.46			.26
Good		.45			.21			.17			.10
Poor		.35			.03			.06			.04
Bust		.05			.17			.21			.07

a.	Your portfolio is invested 22 percent each in A and C, and 56 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b-1.	What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.)
b-2.	What is the standard deviation? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

a.	Expected return		%
b-1.	Variance
b-2.	Standard deviation		%