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Consider the following information about three stocks: Rate of Return If State Occurs State of Probability of Economy Economy State of .20 25 Stock C
Consider the following information about three stocks: Rate of Return If State Occurs State of Probability of Economy Economy State of .20 25 Stock C 50 12 50 Stock A Boom Normal Bust Stock B 50 .30 .38 16 a-1. If 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 and enter a-2. What is the variance? (Do not round intermediate calculations and round your a-3. What is the standard deviation? (Do not round intermediate calculations and b. If the expected T-bill rate is 3.60 percent, what is the expected risk premium on the your answer as a percent rounded to 2 decimal places, e.g., 32.16.) answer to 5 decimal places, eg.,16161 enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) 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 3.20 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-2. What are the approximate and exact expected real risk premiums on the portfolio? (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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