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Consider the following information about three stocks: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B
Consider the following information about three stocks:
State of Economy Probability of State of Economy Rate of Return if State Occurs
Stock A Stock B Stock C
Boom
Normal
Bust
a
If your portfolio is invested percent each in A and B and percent in C what is the portfolio expected return? Do not round intermediate calculations and enter your answer as a percent rounded to decimal places, eg
a What is the variance? Do not round intermediate calculations and round your answer to decimal places, eg
a What is the standard deviation? Do not round intermediate calculations and enter your answer as a percent rounded to decimal places, eg
b If the expected Tbill rate is percent, what is the expected risk premium on the portfolio? Do not round intermediate calculations and enter your answer as a percent rounded to decimal places, eg
c If the expected inflation rate is 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 decimal places, eg
c 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 decimal places, eg
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