Consider the following information:

          Rate of Return if State Occurs

State of   Probability of 

Economy   State of Economy   Stock A   Stock B   Stock C

Boom      0.54         0.12         0.20         0.38    

Bust       0.46           0.14           0.04       −   0.07 

a. What is the expected return on an equally weighted portfolio of these three stocks? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Expected return ?

%

b. What is the variance of a portfolio invested 18 percent each in A and B and 64 percent in C? (Do not round intermediate calculations and round your answer to 6 decimal places. (e.g., 32.161616))

Variance ?