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

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Consider the following information about three stocks: Rate of Return If State Occurs Stock A Stock B State of Economy Boom Normal Bust Probability of State of Economy .25 .48 .27 22 Stock C .56 .15 -44 .34 .17 -35 .19 .03 a-1. If your portfolio is invested 45 percent each in A and B and 10 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-2. What is the variance? (Do not round Intermediate calculations and round your answer to 5 decimal places, e.g., 16161.) a-3. What is the standard deviation? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If the expected T-bill rate is 3.90 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. If the expected inflation rate is 3.50 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-2. What are the approximate and exact expected real risk premiums on the portfolio? (Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

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