Consider the following information: State of Probability of Rate of Return if State Occurs Economy State of Economy Stock A Stock B Stock C Boom .19 .366 .466 .346 Good .41 .136 .116 .186 Poor Bust .31 .09 .026 -.126 036 -.266 -.091 -.106 a. Your portfolio is invested 31 percent each in A and C and 38 percent in B. What is the expected return of the portfolio? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the variance of this portfolio? Note: Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161. c. What is the standard deviation of this portfolio? Note: 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. Variance c. Standard deviation % I1%

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:
State of
Probability of
Rate of Return if State Occurs
Economy State of Economy
Stock A
Stock B
Stock C
Boom
.19
.366
.466
.346
Good
.41
.136
.116
.186
Poor
Bust
.31
.09
.026
-.126
036
-.266
-.091
-.106
a. Your portfolio is invested 31 percent each in A and C and 38 percent in B. What is the expected return of the portfolio?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
b. What is the variance of this portfolio?
Note: Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.
c. What is the standard deviation of this portfolio?
Note: 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. Variance
c. Standard deviation
%
I1%
Transcribed Image Text:Consider the following information: State of Probability of Rate of Return if State Occurs Economy State of Economy Stock A Stock B Stock C Boom .19 .366 .466 .346 Good .41 .136 .116 .186 Poor Bust .31 .09 .026 -.126 036 -.266 -.091 -.106 a. Your portfolio is invested 31 percent each in A and C and 38 percent in B. What is the expected return of the portfolio? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the variance of this portfolio? Note: Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161. c. What is the standard deviation of this portfolio? Note: 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. Variance c. Standard deviation % I1%
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