Expected return on equally weighted portfolio of three stock

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Reference no: EM131300177

Consider the following information:

Rate of Return If State Occurs

State of Probability of

Economy State of Economy Stock A Stock B Stock C

Boom .62 .09 .17 .35

Bust .38 .20 .10 −.06

a. What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Expected return %

b. What is the variance of a portfolio invested 16 percent each in A and B and 68 percent in C? (Do not round intermediate calculations and round your answer to 6 decimal places, e.g., 32.161616.)

Variance

Reference no: EM131300177

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