Consider the following information about three stocks:

a. If your portfolio is invested 40 percent each in A and B and 20 percent in C, what is the portfolio expected return? The variance? The standard deviation?

b.If the expected T-bill is is 3.80 percent, what is the expected premium on the portfolio?

c. If the expected inflation rate is 3.50 percent, what are the appropriate and exact expected real returns on the portfolio?What are the approximate and exact expected real risk premiums on the portfolio?

please answer all parts

Rate of Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Stock C Boom 25 .21 .36 .55 .60 .17 Normal Bust .13 -.28 .15 .00 -.45 Input area: Probability Stock A Stock B Stock C State Boom Normal Bust weights b. T-bill rate Inflation rate C. Output area: Portfolio Return Return Deviation Squared Deviation Probability Product Product State Boom Poor Bust E(R) = Variance = Standard Deviation % b. Expected risk premium C. Approximate expected real return Exact expected real return Approximate real risk-free rate Exact real risk-free rate Approximate expected real risk premium Exact expected real risk premium