Consider the following information about three stocks: Rate of Return if State Occurs Stock A Stock B Stock C State of Economy Boom Normal Bust Probability of State of Economy .25 .45 .30 .25 .22 .00 .30 .17 30 .56 .14 46 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 your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a-2.What is the variance? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.) a-3.What is the standard deviation? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If the expected T-bill rate is 4.80 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-1.1f the expected inflation rate is 4.30 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.) - 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-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 your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a-2.What is the variance? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 16161.) a-3.What is the standard deviation? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If the expected T-bill rate is 4.80 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 4.30 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.) - 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 % % % % % %
