Consider the following information on three stocks:

Rate of Return If State Occurs_____

State of EconomyProbability of State

of EconomyStock AStock BStock C

Boom.25.32.44.60

Normal.40.24.22.20

Bust.35.02.24.40

c-1 If the expected inflation rate is 4.00 percent, what are the approximate and exact expected real returns on the portfolio? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

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 your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Approximate expected real risk premium ______ %

Exact expected real risk premium _______ %