What is the portfolio standard deviation

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ABC Company is considering investing in a portfolio consisting stock A, stock B and stock C. some research revealed the rate of return to be earned on the portfolio is directly related to how the state economy performs in the near future. The table below shows the detail information

State of Probability of Rate of Return if State Occurs economy Stock A           Stock B              Stock C

Boom                           10%                                                  24%               5%                  40%

Normal                           70%                                                  11%             6%                   9%

Recession                          20%                                                -30%            7%                   -5%

If the portfolio consists of 30% stock A, 50% stock B and 20% stock C,

Question a. What is the expected return on the portfolio?

Question b. What is the portfolio standard deviation?

Reference no: EM132534852

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