Consider the following information about three stocks:
Your portfolio manager has invested 30% of your money in Stock A, 50% in Stock B, and the rest in Stock C.
a) What is the expected return of your portfolio?
b) What is the standard deviation of Stock B?
c) What is the covariance between Stocks B and C?
d) What is the correlation coefficient between Stocks B and C?
e) What is the standard deviation of your portfolio? Hint: Instead of using the portfolio variance formula for three stocks, you can save time by calculating the return on the portfolio for all three states of the economy
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