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22 8 points 00:39:29 State of Economy Boom Normal Bust Probability of State of Economy 0.26 0.50 0.24 Rate of Return if State Occurs Stock

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22 8 points 00:39:29 State of Economy Boom Normal Bust Probability of State of Economy 0.26 0.50 0.24 Rate of Return if State Occurs Stock C 0.56 0.09 -0.45 Stock A 0.32 0.13 0.04 a-1. If your portfolio is invested 40% each in A and B and 20% in C, what is the portfolio expected return? (Do not round intermediate calculations. Enter the answer as a percent rounded to 2 decimal places.) Portfolio expected return a-2. What is the variance? (Do not round intermediate calculations. Round the final answer to 8 decimal places.) Variance Approximate expected real return Exact expected real return % a-3. What is the standard deviation? (Do not round intermediate calculations. Enter the answer as a percent rounded to 2 decimal places.) Standard deviation Stock B 0.44 0.11 -0.25 % b. If the expected T-bill rate is 3.40%, what is the expected risk premium on the portfolio? (Do not round intermediate calculations. Enter the answer as a percent rounded to 2 decimal places.) Expected risk premium c-1. If the expected inflation rate is 2.30%, what are the approximate and exact expected real returns on the portfolio? (Do not round intermediate calculations. Enter the answers as a percent rounded to 2 decimal places.) % Approximate expected real risk premium Exact expected real risk premium % % c-2. What are the approximate and exact expected real risk premiums on the portfolio? (Do not round intermediate calculations. Enter the answers as a percent rounded to 2 decimal places.) % %

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