5. The table below provides pertinent information about four stocks: A, B, C and D. Your portfolio consists of 40% Stock A, 20% each of Stocks B, C, and D. Answer the following. a) What is your portfolios Expected Return? The Standard Deviation? b) If the T-Bill rate is 2.6%, what is the expected risk premium of the portfolio? c) If the expected inflation rate is 3.1%, what is the approximate real return of the portfolio? And the approximate real risk premium of the portfolio?

STATE OF ECONOMY	PROBABILITY OF STATE ECONOMY	STOCK A	STOCK B	STOCK C	STOCK D
BOOM	15%	30%	20%	25%	10%
NORMAL	35%	20%	30%	10%	20%
RECESSION	40%	10%	15%	5%	40%
DEPRESSION	10%	-20%	-10%	-30%	50%