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    Portfolio risk and return

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    The following probability distributions of returns for three stocks have been estimated:

    State of the Economy: Probability: Returns if State Occurs:
    Stock A Stock B Stock C
    Boom 40% 14% 8% -6%
    Normal 20% 10% 6% 4%
    Recession 40% -4% 5% 10%

    What is the expected return, the variance, and the standard deviation of a portfolio which is invested 50% in stock A, 10% in stock B, and 40% in stock C?

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    https://brainmass.com/business/bond-valuation/portfolio-risk-return-304372

    Solution Summary

    The solution calculates the expected return, the variance, and the standard deviation of a portfolio of stocks.

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