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Consider the following information about three stocks: Probability of Rate of Return if State Occurs State of State of Economy Economy Stock A Stock Stock
Consider the following information about three stocks: Probability of Rate of Return if State Occurs State of State of Economy Economy Stock A Stock Stock C Room 0.22 0.30 0.42 0.58 Normal 0.46 0.23 0.21 0.19 Buat 0.32 0.01 -0.22 -0.50 2-1. If your portfolio is invested 25% each in A and B and 50% 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 3-2. What is the variance? (Do not round Intermediate calculations. Round the final answer to 8 decimal places.) Variance 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 b. If the expected T-bill rate is 4.50%, what is the expected risk premium on the portfolio? (Dorfot 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 2.50%, 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 return
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