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Consider the following information about three stock:s Rate of Return If State Occurs State of Economy Boom Normal Bust Probability of State of Economy 0.20
Consider the following information about three stock:s Rate of Return If State Occurs State of Economy Boom Normal Bust Probability of State of Economy 0.20 0.40 0.40 Stock A 0.34 0.25 0.03 Stock B 0.46 0.23 -0.25 Stock C 0.50 0.20 -0.42 a-1 if your portfolio is invested 35 percent each in A and B and 30 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-2 What is the variance? (Do not round intermediate calculations. Round the final answer to 5 decimal places.) Variance a-3 What 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 4.70 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-1 If the expected inflation rate is 2.70 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-2 What 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 premiunm Exact expected real risk premium
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