State Economy of Probability of State Stock Stock Stock of Economy A в с Вoom .10 35 .40 .27 .08 Good .60 .16 .17 Рoor .25 -.01 -.03 -.04 Bust .05 -.12 -.18 -.09 a. Your portfolio is invested 30 percent each in A and C, and 40 percent in B. What is the expected return of the portfolio? b. What is the variance of this portfolio? The 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
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10. Returns and Standard Deviations [LO1] Consider
the following information:
Rate of Return If
State Occurs
Transcribed Image Text:10. Returns and Standard Deviations [LO1] Consider the following information: Rate of Return If State Occurs
State
Economy
of Probability of State Stock Stock Stock
C
of Economy
B
Вoom
.10
.27
35
.16
.40
Good
.60
.17
.08
Рoor
.25
-.01
-.03
-.04
Bust
.05
-.12
-.18
-.09
453
a. Your portfolio is invested 30 percent each in A and C, and
40 percent in B. What is the expected return of the portfolio?
b. What is the variance of this portfolio? The standard
deviation?
Transcribed Image Text:State Economy of Probability of State Stock Stock Stock C of Economy B Вoom .10 .27 35 .16 .40 Good .60 .17 .08 Рoor .25 -.01 -.03 -.04 Bust .05 -.12 -.18 -.09 453 a. Your portfolio is invested 30 percent each in A and C, and 40 percent in B. What is the expected return of the portfolio? b. What is the variance of this portfolio? The standard deviation?
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