Consider the following information on three stocks:

				Rate of Return If State Occurs
State of Economy	Probability of State of Economy			Stock A			Stock B			Stock C
Boom		.25		.30			.42		.54
Normal		.45		.12			.10		.08
Bust		.30		.03			.24		.44

a-1 If your portfolio is invested 45 percent each in A and B and 10 percent in C, what is the portfolio's expected return? Portfolio expected return 10.11% a-2 What is the variance? Variance .03641 a-3 What is the standard deviation? Standard deviation 19.08 % b. If the expected T-bill rate is 3.20 percent, what is the expected risk premium on the portfolio? Expected risk premium 6.91% c-1 If the expected inflation rate is 2.80 percent, what are the approximate and exact expected real returns on the portfolio?

Approximate expected real return	7.31%
Exact expected real return	7.11%

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	%