Consider the following information about three stocks:

Rate of Return If State OccursState ofProbability ofEconomyState of EconomyStock AStock BStock CBoom0.200.280.400.56Normal0.450.220.200.18Bust0.350.000.200.48

a-1If 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 the answer as a percent rounded to 2 decimal places.)

Portfolio expected return%

a-2What is the variance?(Do not round intermediate calculations. Round the final answer to 5 decimal places.)

Variance

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

Standard deviation%

b.If the expected T-bill rate is 4.40 percent, what is the expected risk premium on the portfolio?(Do not round intermediate calculations. Enter the answer as a percent rounded to 2 decimal places.)

Expected risk premium%

c-1If the expected inflation rate is 2.40 percent, what are the approximate and exact expected real returns on the portfolio?(Do not round intermediate calculations. Enter the answers as a percent rounded to 2 decimal places.)

Approximate expected real return%Exact expected real return%

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

Approximate expected real risk premium%Exact expected real risk premium%