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Only need answers to b, c-1, and c-2 Consider the following information about three stocks: Rate of Return if State Occurs Probability of State of
Only need answers to b, c-1, and c-2
Consider the following information about three stocks: Rate of Return if State Occurs Probability of State of Economy 20 ,50 .30 State of Economy Boom Normal Bust Stock A .38 Stock B .50 Stock C .54 .13 -.45 21 .16 .05 - 28 b. 0-1. If your portfolio is invested 35 percent each in A and B and 30 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.) 0-2. What is the variance? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 16161.) 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.) . If the expected T-bill rate is 4.70 percent, what is the expected risk premium on the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g. 32.16.) c-1. If the expected inflation rate is 4.20 percent, what are the approximate and exact expected real returns on the portfollo? (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.) Step by Step Solution
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