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Help Center Question 5 Not answered Marked out of 15.00 Flag question Consider the following information about three stocks: Rate of Return If State Occurs
Help Center Question 5 Not answered Marked out of 15.00 Flag question Consider the following information about three stocks: Rate of Return If State Occurs State of Probability of Economy State of Economy Stock A Stock B Stock C Boom 20 .28 .40 .56 Normal .45 .22 20 .18 Bust .35 .00 - 20 -.48 If your portfolio is invested 30 percent each in A and B, and if the expected T-bill rate is 4.20 percent, what is the expected risk premium on the portfolio? Hint: First find how much you should invest in Stock C. Then, try to find risk premium of the portfolio Please provide your answer in percentage (%), and in two decimals! Answer: Question 6 Complete Marked out of 2.50 P Flag question average return The average compound return earned per year over a multiyear period is called the
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