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Rate of Return If State Occurs State of Probability of State of Economy Economy Stock A...

Question:

Rate of Return If State Occurs State of Probability of State of Economy Economy Stock A Stock B Stock C .55 .06 14 Boom Bust

Rate of Return If State Occurs State of Probability of State of Economy Economy Stock A Stock B Stock C .55 .06 14 Boom Bust .45 .34 -.07 10 .02 a. What is the expected return on an equally weighted portfolio of these three stocks? (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 a portfolio invested 22 percent each in A and B and 56 percent in C? (Do not round intermediate calculations and round your answer to 6 decimal places, e.g., 161616.)

Answers

state of economy rate of return if state occurs Stock A stock B Stock C 0.06 0.14 0.34 0.10 0.02 -0.70 weighted return (weighstate of economy deviation “2x probability rate of return if state occurs Stock A Stock B Stock C 0.06 0.14 0.34 0.10 0.02 -0

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