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need help! LO1, LO2 25. Portfolio Returns and Deviations Consider the following information on a portfolio of three stocks: State of Economy Boom Normal Bust
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LO1, LO2 25. Portfolio Returns and Deviations Consider the following information on a portfolio of three stocks: State of Economy Boom Normal Bust Probability of State of Economy .25 .60 .15 Stock A Rate of Stock B Rate of Return Return .04 .09 .15 43 .33 .13 -.14 Stock C Rate of Return tro .55 .19 -.28 a. If your portfolio is invested 40 percent each in A and B and 20 percent in C, what is the portfolio's expected return? The variance? The standard deviation? b. If the expected T-bill rate is 3.4 percent, what is the expected risk premium on the portfolio? nggots is equal to the ratio of their betas.
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