17) Consider the following information about three stocks

Rate of return if state occurs

State of economy Probability of state

of economy Stock A Stock B

Boom 0.333 22% 30%

Normal 0.333 14% 2%

Recession 0.333 3% -40%

a.If your portfolio investment is composed of 45% for Stock A, and a 65% for Stock B. What is the portfolio expected return? variance? And standard deviation?

If the expected T-Bill rate is 3.90%. What's the expected risk premium of the portfolio?