What is the portfolio variance if 30% is invested in Stock S and 70% is invested in Stock T?
a) .002220
b) .004056
c) .006224
d) .008080
e) .098000
Table 3.1
State of Economy Probability of State of Economy Return if State Occurs: Stock S Return if State Occurs: Stock T
Boom 40% 12% 20%
Normal 60% 6% 4%