5. return Of 10.03 percent, how much money will you invest in Stock X7 In Stock Y Calculating Expected Return [LO1] Based on the following information, calcu- late the expected return: Probability of Portfolio State of State of Return Economy Economy If State Occurs Recession .20 -.08 Boom .80 .15 6. Calculating Expected Return [L01] Based on the following information, calcu- late the expected return: State of Economy Recession Normal Boom Probability of State of Economy .10 .60 .30 Portfolio Return If State Occurs - 15 .09 .23 7. Calculating Returns and Standard Deviations [LOL] Based on the following infor- mation, calculate the expected return and standard deviation for Stock A and Stock B: State of Economy Recession Normal Probability of State of Economy .10 60 Rate of Return If State Occurs Stock A Stock B .04 -.17 .09 12 large-company stocks and long-term government bonds. What is the return folio that is equally invested in small-company stocks and Treasury bills? 22. CAPM (L04) Using the CAPM, show that the ratio of the risk premiu assets is equal to the ratio of their betas. 23. Portfolio Returns and Deviations (L02] Consider the following in about three stocks: State of Economy Boom Normal Bust Probability of State of Economy 25 .60 Stoc Rate of Return If State Occurs Stock A Stock B 21 .33 .17 .11 -21 . 15 .00 -4 a. If your portfolio is invested 40 percent each in A and B and 20 percent in is the portfolio expected return? The variance? The standard deviation? b. If the expected T-bill rate is 3.80 percent, what is the expected risk pre the portfolio? c. If the expected inflation rate is 3.30 percent, what are the approximate a expected real returns on the portfolio? What are the approximate and e pected real risk premiums on the portfolio? Analyzing a Portfolio [LO2, 4] You want to create a portfolio equally as the market, and you have $1,000,000 to invest. Given this information, fill in of the following table: Asset Stock A Stock B Stock C Risk-free asset Investment $165,000 $350,000 Beta .80 1.09 1.27 malyzing a Portfolio [LO2, 4) You have $100,000 to invest in a portfolio ning Stock X and Stock Y. Your goal is to create a portfolio that has an ex urn of 12.7 percent. If Stock X has an expected return of 11 1.25, and Stock Y has an expected retur ch money will you inyo beta of