Rate of Return if State Occurs Probability of State State of Economy of Economy Boom .30...
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Rate of Return if State Occurs Probability of State State of Economy of Economy Boom .30 Stock A .36 Stock B Stock C .48 .60 Normal Bust .40 .30 .15 .13 .11 .06 -.28 -.48 a-1. If your portfolio is invested 25 percent each in A and B and 50 percent in C, what is the portfolio expected return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a-2. What is the variance? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.) a-3. What is the standard deviation? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If the expected T-bill rate is 3.50 percent, what is the expected risk premium on the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c-1. If the expected inflation rate is 3.10 percent, what are the approximate and exact expected real returns on the portfolio? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c-2. What are the approximate and exact expected real risk premiums on the portfolio? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. a-1. Portfolio expected return 19.25% a-2. Variance 0.00333 x a-3. Standard deviation b. Expected risk premium c-1. Approximate expected real return Evart ovnerted real return 0.06 % 15.75 x % 16.15 % 15.66 X Rate of Return if State Occurs Probability of State State of Economy of Economy Boom .30 Stock A .36 Stock B Stock C .48 .60 Normal Bust .40 .30 .15 .13 .11 .06 -.28 -.48 a-1. If your portfolio is invested 25 percent each in A and B and 50 percent in C, what is the portfolio expected return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a-2. What is the variance? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.) a-3. What is the standard deviation? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If the expected T-bill rate is 3.50 percent, what is the expected risk premium on the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c-1. If the expected inflation rate is 3.10 percent, what are the approximate and exact expected real returns on the portfolio? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c-2. What are the approximate and exact expected real risk premiums on the portfolio? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. a-1. Portfolio expected return 19.25% a-2. Variance 0.00333 x a-3. Standard deviation b. Expected risk premium c-1. Approximate expected real return Evart ovnerted real return 0.06 % 15.75 x % 16.15 % 15.66 X
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