Returns and Standard Deviations Consider the following information:
Rate of  Return If State Occurs
State of Economy
Probability of State of Economy
Stock A
Stock B
Stock C
Boom
0.2
0.18
0.48
0.33
Good
0.4
0.11
0.15
Poor
0.3
0.05
-.09
-.05
Bust
0.1
-.03
-.32
a. Your portfolio is invested 25 percent each in A and C, and 50 percent in B. What is the expected return of the portfolio?
b. What is the variance of this portfolio? The standard deviation?