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Consider the following information about three stocks: State ofEconomyProbability of State of EconomyRate of Return if State OccursStock AStock BStock CBoom 0 . 2 0

Consider the following information about three stocks: State ofEconomyProbability of State of EconomyRate of Return if State OccursStock AStock BStock CBoom 0.200.380.500.50 Normal 0.550.160.140.12 Bust 0.250.000.300.50 a-1. If your portfolio is invested 30% each in A and B and 40% 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 3.70%, 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 %, 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 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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