Question: State probablity Return on A Return on B Boom .20 20% 5% Normal .50 10% 8% Bust .30 8% 12% What is the variance of

State probablity Return on A Return on B

Boom .20 20% 5%

Normal .50 10% 8%

Bust .30 8% 12%

What is the variance of a portfolio with 80% of the funds invested in A? Answers: 9.6, 13.69, 10.9, 12.25, 15.21

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