Problem 11.09 – Expected return on portfolio and variance given stocks A, B, and C.

Essentials of Corporate Finance

Ross, Westerfield, and Jordan

10th Edition and 11th Edition

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Difficulty – Medium

You are provided with two states of the economy, and three stocks, A, B, and C. You are asked to calculate the expected return of an equally weighted portfolio of the three stocks, and for the second part, you're asked to compute the portfolio's variance.

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