What is expected return on equally weighted portfolio

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Reference no: EM13948671

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 0.54 0.12 0.20 0.38

Bust 0.46 0.14 0.04 − 0.07

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

Expected return ?

b. What is the variance of a portfolio invested 18 percent each in A and B and 64 percent in C? (Do not round intermediate calculations and round your answer to 6 decimal places. (e.g., 32.161616))

Variance ?

Reference no: EM13948671

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