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Consider the following Information about three stocks: State of Economy Boom Normal Bust Probability of State of Economy 8.30 0.40 Rate of Return if State
Consider the following Information about three stocks: State of Economy Boom Normal Bust Probability of State of Economy 8.30 0.40 Rate of Return if State Occurs Stock A Stock B Stock 2.27 0.32 0.55 2.23 3.18 8.15 0.01 -8.32 -0.48 e.se 2-1. 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 11.54% 2-2. What is the variance? (Do not round Intermediate calculations. Round the final answer to 8 decimal places.) Variance 2-3. 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 %
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