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1 Consider the following information about three stocks: Rate of Return If State Occurs Stock A Stock B Stock C State of Probability of State

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1 Consider the following information about three stocks: Rate of Return If State Occurs Stock A Stock B Stock C State of Probability of State of Economy Economy Boom 25 Normal .60 Bust .15 21 .17 00 .33 .11 21 55 09 -45 0-1.11 your portfolio is invested 40 percent each in A and B and 20 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.) Q. What is the variance? (Do not round Intermediate calculations and round 2. your answer to 5 decimal places, e.g. 16161.) - What is the standard deviation? (Do not round intermediate calculations and enter 3. your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If the expected T-bill rate is 380 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 3.30 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. What are the approximate and exact expected real risk premiums on the portfolio? 2. (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

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