Consider the following information about three stocks:

		Rate of Return if State Occurs	Rate of Return if State Occurs	Rate of Return if State Occurs
State of Economy	Probability of State Economy	Stock A	Stock B	Stock C
Boom	.25	.25	.30	.56
Normal	.45	.22	.17	.14
Bust	.30	.00	-.30	-.46

a-1	If your portfolio is invested 30 percent each in A and B and 40 percent in C, what is the portfolio expected return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Portfolio expected return?

_________________%

a-2	What is the variance? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161.)

Variance? ____

a-3	What is the standard deviation? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Standard deviation?

_______%

b.	If the expected T-bill rate is 4.80 percent, what is the expected risk premium on the portfolio? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Expected risk premium?

________%

c-1	If the expected inflation rate is 4.30 percent, what are the approximate and exact expected real returns on the portfolio? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Approximate expected real return?	_____________%
Exact expected real return?	_____________%

c-2	What are the approximate and exact expected real risk premiums on the portfolio? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Approximate expected real risk premium?	________%
Exact expected real risk premium?	_________%