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 |
0.065 |
0.240 |
0.260 |
| Growth |
0.36 |
0.065 |
0.120 |
0.180 |
| Stagnant |
0.24 |
0.065 |
0.030 |
0.090 |
| Recession |
0.15 |
0.065 |
-0.110 |
-0.200 |
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 9% in asset J, 51% in asset K, and 40% in asset L?
d. What is the portfolio's variance and standard deviation using the same asset weights from part (c)?