Rate of return if state occurs state of probability of


Consider the following information: Rate of Return if State Occurs State of Probability of Economy State of Economy Stock A Stock B Stock C Boom 0.60 0.08 0.16 0.34 Bust 0.40 0.18 0.08 − 0.07 a. What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Expected return % b. What is the variance of a portfolio invested 18 percent each in A and B and 64 percent in C? (Do not round intermediate calculations and round your answer to 6 decimal places. (e.g., 32.161616)) Variance

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Financial Management: Rate of return if state occurs state of probability of
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