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Part c-2 ---- 6.14 for approximate expected real risk premium is INCORRECT and EXACT EXPECTED real risk premium is not 5.97, that is incorrect please
Part c-2 ---- 6.14 for approximate expected real risk premium is INCORRECT
and EXACT EXPECTED real risk premium is not 5.97, that is incorrect
please show step by step calculations thank you
Consider the following information about three stocks Rate of Return If State Occurs State of Economy Probability of Stock C 56 .00 -.45 State of Economy Stock A Stock B Boom Normal Bust 28 50 32 13 04 24 -.25 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. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Portfolio expected return 12.34 % a-2 What is the variance?(Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161.) Variance a-3 What is the standard deviation? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Standard deviation 2086 | 96 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. Enter your answer as a percent rounded to 2 decimal places e-g., 32.16.) Expected risk premium 9.04 96 c-1 If the expected infiation rate is 2.90 percent, what are the approximate and exact expected real returns on the portfolio? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) 944 % Approximate expected real return Exact expected real return 9.17 % 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 expect Exact expected real risk premium ed real risk premiumStep by Step Solution
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