Consider the following information on three stocks:

a-1 If your portfolio is invested 40 percent each in A and B and 20 percent in C, what is the portfolio expected return? Portfolio expected return = _________ % a-2 What is the variance? Variance= _________ a-3 What is the standard deviation? Standard deviation= _________ % b. If the expected T-bill rate is 4.00 percent, what is the expected risk premium on the portfolio? Expected risk premium= _________ % c-1 If the expected inflation rate is 3.60 percent, what are the approximate and exact expected real returns on the portfolio?

Approximate expected real return =	%
Exact expected real return -	%

c-2 What are the approximate and exact expected real risk premiums on the portfolio?

Approximate expected real risk premium=_________ %

Exact expected real risk premium = ____________ %

Rate of Return It State Occurs Stock A Stock B Stock C State of Economy Boom Normal Bust Probability of State of Economy . 20 .50 .30 .36 .58 .24 .20 .94 -.45