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Please show calculations in excel ( Show Work) 2. You are given the following information on three stocks: Rate of Return if State Occurs Stock
Please show calculations in excel ( Show Work)
2. You are given the following information on three stocks: Rate of Return if State Occurs Stock A Stock B Stock C State of the Probability of the Economy State of Economy Bust 0.15 Normal 0.60 Boom 0.25 0.21 0.17 0.00 0.33 0.11 -0.21 0.55 0.09 -0.45 a) What is the portfolio expected return, variance, and standard deviation if you invest 40% in A and B and 20% in C? b) What is the expected risk-premium on the portfolio if the T-bill rate is 3.8%? 2. You are given the following information on three stocks: Rate of Return if State Occurs Stock A Stock B Stock C State of the Probability of the Economy State of Economy Bust 0.15 Normal 0.60 Boom 0.25 0.21 0.17 0.00 0.33 0.11 -0.21 0.55 0.09 -0.45 a) What is the portfolio expected return, variance, and standard deviation if you invest 40% in A and B and 20% in C? b) What is the expected risk-premium on the portfolio if the T-bill rate is 3.8%
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