Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please use excel table [ [ , , Rate of Return If State Occurs ] , [ State of Economy,Probability of State,,, ] ,

Please use excel
\table[[,,Rate of Return If State Occurs],[State of Economy,Probability of State,,,],[Boom,of Economy,Stock A,Stock B,Stock C],[Normal,.20,.20,.32,.54],[Bust,.45,.18,16,.14],[,.35,.02,-.34,-.42]]
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 Intermedlate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.,32.16.)
a-2. What is the varlance? (Do not round Intermedlate calculations and round your answer to 5 decimal places, e.g.,16161.)
a-3. What is the standard deviation? (Do not round Intermedlate calculatlons and enter your answer as a percent rounded to 2 decimal places, e.g.,32.16.)
b. If the expected T-bill rate is 3.80 percent, what is the expected risk premium on the portfolio? (Do not round intermedlate calculations and enter your answer as a percent rounded to 2 declmal places, e.g.,32.16.)
c-1. If the expected Inflation rate is 3.40 percent, what are the approximate and exact expected real returns on the porfollio? (Do not round Intermedlate calculatlons 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 porffolio? (Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g.,32.16.)
\table[[a-1. Pertiolio expected return,6.28,1:],[a-2. Varianse,,],[a-3. Srandard deviation,,(2x)
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions