The table below shows the expected rates of return for three stocks and their

weights in some portfolio:

Part $1$

What is the portfolio return during a recession?

Correct $$

The portfolio return is the weighted average of the individual expected returns:

$E(R_{P\text{r}\text{e}\text{c}\text{e}\text{s}\text{s}\text{i}\text{o}\text{n}})=w_{A}E(R_{\text{A}\text{r}\text{e}\text{c}\text{e}\text{s}\text{s}\text{i}\text{o}\text{n}})+w_{B}E(R_B,$ recession $)+w_{C}E(R_C,$ recession $)$

$={0\mathrm{.}5}^{**}0\mathrm{.}08+{0\mathrm{.}2}^{**}0\mathrm{.}03+{0\mathrm{.}3}^{**}0\mathrm{.}14$

$=0\mathrm{.}088$

Part $2$

What is the expected portfolio return?

Part $3$

What is the standard deviation of the portfolio returns?