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

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Consider the following information about three stocks: Rate of Return If State Occurs State of Probability of Economy State of Economy Stock A Stock B Stock C Boom .25 21 .33 .55 Normal .60 .17 .11 1.09 Bust 15 .00 -21 -,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 found 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 3.80 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.)

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