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Item 4 2 0 points eBookHintPrintReferencesCheck my workCheck My Work button is now enabledItem 4 Consider the following information on three stocks: Rate of Return

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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 .26.32.44.56
Normal .50.13.11.09
Bust .24.04.25.45
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? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.,32.16.)
a-2. What is the variance? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g.,.32161.)
a-3. What is the standard deviation? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.,32.16.)
b. If the expected T-bill rate is 3.30 percent, what is the expected risk premium on the portfolio? (Do not round intermediate calculations abd enter your answer as a percent rounded to 2 decimal places, e.g.,32.16.)
c-1. If the expected inflation rate is 2.90 percent, what are the approximate and exact expected real returns on the portfolio? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g.,32.16.)
c-2. What are the approximate and exact expected real risk premiums on the portfolio? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g.,32.16.)

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