Consider the following information: Rate of Return if State Occurs Probability of State of Economy State of Economy Stock A Stock B Stock C Вoom .15 .35 .40 .28 Good .45 .16 .17 .09 Рor .30 -.01 -.03 .01 Bust .10 -10 -12 -.09 а. Your portfolio is invested 30 percent each in A and C, and 40 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.) a. Expected return % b-1. Variance b-2. Standard deviation %

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Consider the following information:
Rate of Return if State Occurs
Probability of State
of Economy
.15
State of Economy
Stock A
Stock B
Stock C
Вoom
.35
.40
.28
Good
.45
.16
.17
.09
Рor
.30
-.01
-.03
.01
Bust
10
-10
-12
-.09
Your portfolio is invested 30 percent each in A and C, and 40 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.)
а.
a. Expected return
%
b-1. Variance
b-2. Standard deviation
%
Transcribed Image Text:Consider the following information: Rate of Return if State Occurs Probability of State of Economy .15 State of Economy Stock A Stock B Stock C Вoom .35 .40 .28 Good .45 .16 .17 .09 Рor .30 -.01 -.03 .01 Bust 10 -10 -12 -.09 Your portfolio is invested 30 percent each in A and C, and 40 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.) а. a. Expected return % b-1. Variance b-2. Standard deviation %
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