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Rate of Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Stock C Boom 0.76 0.29 0.33 0.31 Bust 0.24 0.15 0.11 0.09    Requirement 1: What...

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Finance


Rate of Return if State Occurs
State of EconomyProbability of
State of Economy		Stock AStock BStock C
Boom0.760.290.330.31
Bust0.240.150.110.09

  

Requirement 1:

What is the expected return on an equally weighted portfolio ofthese three stocks? (Do not round your intermediatecalculations.)

26.36%

28.86%

38.39%

41.16%

20.63%

  

Requirement 2:

What is the variance of a portfolio invested 20 percent each inA and B and 60 percent in C? (Do not round yourintermediate calculations.)

0.013091

0.007591

0.015291

0.011091

0.015591

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Transcribed Image Text

Rate of Return if State OccursState of EconomyProbability ofState of EconomyStock AStock BStock CBoom0.760.290.330.31Bust0.240.150.110.09  Requirement 1:What is the expected return on an equally weighted portfolio ofthese three stocks? (Do not round your intermediatecalculations.)26.36%28.86%38.39%41.16%20.63%  Requirement 2:What is the variance of a portfolio invested 20 percent each inA and B and 60 percent in C? (Do not round yourintermediate calculations.)0.0130910.0075910.0152910.0110910.015591

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