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Consider the following information about three stocks: Rate of Return If State Occurs Probability of State State of Economy of Economy Boom Normal .25

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Consider the following information about three stocks: Rate of Return If State Occurs Probability of State State of Economy of Economy Boom Normal .25 Stock A .13 Stock B .29 Stock C .60 .60 .08 .11 .13 Bust .15 .02 -.18 -.45 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 2. your 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 3.70 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 3.30 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 rounded to 2 decimal places, e.g., 32.16.) a-1. Portfolio expected return a-2. Variance a-3. Standard deviation b. Expected risk premium c-1. Approximate expected real return c-1. Exact expected real return c-2. Exact expected real risk premium c-2. Approximate expected real risk premium didi di di % % % % % % %

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