Consider the following information about three stocks: Rate of Return if State Occurs State of Economy Boom Normal Bust Probability of State of Economy 0.25 0.60 0.15 Stock A 0.21 0.17 0.00 Stock B 0.33 0.11 -0.21 Stock C 0.55 0.09 -0.45 a. If your portfolio is invested 40% each in A and B and 20% in C, what is the portfolio expected return? (3 points) b. What is the standard deviation? (6 points) c. If the expected T-bill rate is 3.80%, what is the expected risk premium on the portfolio? (3 points) Question 8 (10 points) a. A stock has had returns of 13%, 20%, 22%, -11%, 27%, and -5% over the last six years. What are the arithmetic and geometric average returns for the stock? (5 points) b. You find a certain stock that had returns of 14%, -11%, 21%, and 22% for four of the last five years. The average return of the stock over this period was 12%. What was the stocks return for the missing year? What is the standard deviation of the stock's returns? (5 points)