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 60 .18 . .04 31
Bust .40 .03 .16 -11
a. What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations and enter your answer percent rounded to 2 decimal places, e.g., 32.16.) b.What is the variance of a portfolio invested 20 percent each in A and B and 60 percent in C? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g. 16161.)
a. Expected return _____
b. Variance of a portfolio _____