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

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Consider the following information about three stocks: Rate of Return if State Occurs Stock A State of Economy Boom Normal Bust Probability of State of Economy .25 45 30 30 .12 .03 Stock B 42 .10 .24 Stock C .54 .08 .44 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- What is the variance? (Do not round intermediate calculations and round your 2. 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 3.20 percent, what is the expected risk premium on the portfolio? (Do not round intermediate calculations and eater your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c-1.If the expected inflation rate is 2.80 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 Exact expected real return c-2. Approximate expected real risk premium Exact expected real risk premium % 1% % %

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