Rate of Return if State Occurs State of Economy Probability of State of Economy Boom Bust...

 

Transcribed Image Text:

Rate of Return if State Occurs State of Economy Probability of State of Economy Boom Bust .60 .40 Stock A 15 Stock B Stock C .23 .42 .18 .08 -.09 a. What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the variance of a portfolio invested 24 percent each in A and B and 52 percent in C? (Do not round intermediate calculations and round your answer to 6 decimal places, e.g., .161616.) a. Expected return b. Variance % Rate of Return if State Occurs State of Economy Probability of State of Economy Boom Bust .60 .40 Stock A 15 Stock B Stock C .23 .42 .18 .08 -.09 a. What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the variance of a portfolio invested 24 percent each in A and B and 52 percent in C? (Do not round intermediate calculations and round your answer to 6 decimal places, e.g., .161616.) a. Expected return b. Variance %