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Rate of Return If State Occurs   State of Probability of   Economy State of Economy Stock A...

Rate of Return If State Occurs
  State of Probability of
  Economy State of Economy Stock A Stock B Stock C
  Boom .15 .39 .49 .29
  Good .55 .15 .20 .08
  Poor .25 −.01 −.09 −.07
  Bust .05 −.20 −.24 −.10

  

a.

Your portfolio is invested 24 percent each in A and C, and 52 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.)

Solutions

Expert Solution

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -


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