Question
Consider the following information in the table about three stocks. You invest 30 percent each in A and B and 40 percent in C. The
Consider the following information in the table about three stocks.
You invest 30 percent each in A and B and 40 percent in C.
The T-bill rate is 4.20 percent.
The expected inflation rate is 3.80 percent.
What is the expected return on the portfolio?
What is the standard deviation of the portfolio return?
What is the risk premium on the portfolio?
What is the approximate expected real returns on the portfolio?
What is the approximate expected real returns on the T-Bill?
What is the approximate real risk premiums on the portfolio?
What is the exact expected real returns on the portfolio?
What is the exact real returns on the T-Bill?
What is the exact real risk premiums on the portfolio?
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