Expected return and standard deviation. Use the following information to answer the questions State of...
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Expected return and standard deviation. Use the following information to answer the questions
State of Economy Probability of State Return on Asset J in State Return on Asset K in State Return on Asset L in State Boom 0.25 0.070 0.210 0.270 Growth 0.36 0.070 0.110 0.220 Stagnant 0.22 0.070 0.030 0.070 Recession 0.17 0.070 -0.090 -0.190
a.What is the expected return of each asset?
b.What is the variance and the standard deviation of each asset?
c.What is the expected return of a portfolio with 8%in asset J,55%in asset K, and
37% in asset L?
d.What is the portfolio's variance and standard deviation using the same asset weights from part
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