Business Finance Homework Help
Business Finance Homework Help. Expected Return and Variance
| Rate of Return If State Occurs | ||||
| State of | Probability of | |||
| Economy | State of Economy | Stock A | Stock B | Stock C |
| Boom | .60 | .15 | .23 | .42 |
| Bust | .40 | .18 | .08 | −.09 |
| a. |
What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
| Expected return | % |
| b. |
What is the variance of a portfolio invested 24 percent each in A and B and 52 percent in C?(Do not round intermediate calculations and round your answer to 6 decimal places, e.g., 32.161616.) |
| Variance |
Business Finance Homework Help
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