Question: State Probability Return (stock A) Return (stock B) Return (stock C) 1 0.35 10% 15% 20% 2 0.45 5% 7% 10% 3 0.20 4% 12%

State Probability Return (stock A) Return (stock B) Return (stock C) 1 0.35 10% 15% 20% 2 0.45 5% 7% 10% 3 0.20 4% 12% 6% WA = 10%, WB = 55%, WC = 35% Calculate the portfolio standard deviation.

2. State Probability 0.35 0.45 0.20 Return (stock A) 10% -5% -4% Return (stock B) 15% -7% Return (stock C) 20% 10% -6% 2 3 12% WA = 10%, W8 = 55%, Wc = 35% Calculate the portfolio standard deviation

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