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Consider the following information about three stocks: Rate of Return if State Occurs Stock A Stock B Stock C State of Economy Boom Normal Bust

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Consider the following information about three stocks: Rate of Return if State Occurs Stock A Stock B Stock C State of Economy Boom Normal Bust Probability of State of Economy .25 .44 31 .36 20 04 48 15 .26 .52 12 44 a-1. If your portfolio is invested 40 percent each in A and B and 20 percent in C, what is the portfolio expected return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. What is the variance? (Do not round intermediate calculations and round your 2. answer to 5 decimal places, e.g., .16161.) a- What is the standard deviation? (Do not round intermediate calculations and enter 3. your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If the expected T-bill rate is 4.60 percent, what is the expected risk premium on the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) C-1.1f the expected inflation rate is 410 percent, what are the approximate and exact expected real returns on the portfolio? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c. What are the approximate and exact expected real risk premiums on the portfolio? 2. (Do not round intermediate calculations and enter your answers as a percent Anadaniel ARAR 946

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