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		0.30			0.27			0.32			0.55
Normal		0.40			0.23			0.18			0.15
Bust		0.30			0.01			0.32			0.48

a-1. If your portfolio is invested 40% each in A and B and 20% 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 8 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 5.10%, 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 3.10%, 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 premium	%
Exact expected real risk premium	%