You decide to invest in a portfolio consisting of 27 percent Stock A, 38 percent Stock B, and the remainder in Stock C. Based on the following information, what is the variance of your portfolio? Probability of State of Economy State of Economy Recession Normal Boom 0.105 0.647 0.248 Return if State Occurs Stock A Stock B Stock C -2.60% 10.48% 21.37% 24.75% 29.45% -9.20% 8.50% -11.60% 16.00% )0.00778 )0.00837 (10.01130 0.00879 0.00946

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You decide to invest in a portfolio consisting of 27 percent Stock A, 38 percent Stock B, and
the remainder in Stock C. Based on the following information, what is the variance of your
portfolio?
State of Economy
Recession
Normal
Probability of
State of Economy
0.105
0.647
Return if State Occurs
Stock A Stock B Stock C
-2.60%
10.48%
21.37% 24.75% 29.45%
-9.20%
8.50%
-11.60%
16.00%
Boom
0.248
0.00778
0.00837
€30.01130
0.00879
0.00946
Transcribed Image Text:You decide to invest in a portfolio consisting of 27 percent Stock A, 38 percent Stock B, and the remainder in Stock C. Based on the following information, what is the variance of your portfolio? State of Economy Recession Normal Probability of State of Economy 0.105 0.647 Return if State Occurs Stock A Stock B Stock C -2.60% 10.48% 21.37% 24.75% 29.45% -9.20% 8.50% -11.60% 16.00% Boom 0.248 0.00778 0.00837 €30.01130 0.00879 0.00946
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