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What is the variance of portfolio

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Reference no: EM131317753

Returns and standard deviations: Consider the following:

State of economy

Probability of state economy

Rate of Return if state occurs Stock A

Rate of Return if state occurs Stock B

Rate of Return if state occurs Stock C

Recession

.20

.30

.45

.33

Good

.40

.12

.10

.15

Poor

.30

.01

-.15

-.05

Bust

.10

-.20

-.30

-.09

1. Your portfolio is invested 40 percent each in A and C and 20 percent in B. what is the expected rate of return of the portfolio?

2. What is the variance of this portfolio? The standard Deviation?

Reference no: EM131317753

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