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Consider the following information about three stocks: Rate of Return if State Occurs State of Economy Boom Normal Bust Probability of State of Economy .25

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Consider the following information about three stocks: Rate of Return if State Occurs State of Economy Boom Normal Bust Probability of State of Economy .25 .60 .15 Stock A .13 .08 .02 Stock B .29 .11 -18 Stock C .60 .13 -45 a-1.If your portfolio is invested 40 percent each in A and B and 20 percent in C, what is the portfolio expected return? (Do not round intermediate calculations and enter your answer as a percent sounded to 2 decimal places, e.g., 32.16.) a- What is the variance? (Do not round intermediate calculations and round 2. your 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 3.70 percent, what is the expected risk premium on the 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 3.30 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.) 15 % 2-1. Portfolio expected retum a-2. Variance a-3. Standard deviation b. Expected risk premium C-1. Approximate expected real retur c-1. Exact expected real return C-2. Approximate expected real risk premium c-2. Exact expected real risk premium % % % % % %

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