Problem 13-23 Portfolio Returns and Deviations (L01, 2) Consider the following information about three stocks: State of Economy Boom Normal Bust Probability of State of Economy 0.30 0.40 0.30 Rate of Return it State Occurs Stock A Stock B Stock C 0.22 0.32 0.55 0.23 0.18 0.15 0.01 -0.32 -0.48 a-1. If your portfolio is invested 40% each in A and B and 20% in C, what is the portfolio expected return? (Do not round intermediate calculations. Enter the answer as a percent rounded to 2 decimal places.) Portfolio expected return 11.45 % a-2. What is the variance? (Do not round Intermediate calculations. Round the final answer to 8 decimal places.) Variance .05217204 a-3. What is the standard deviation? (Do not round intermediate calculations. Enter the answer as a percent rounded to 2 decimal places.) Standard deviation 22.84 % Standard deviation 22.84 % b. If the expected T-bill rate is 5.10%, what is the expected risk premium on the portfolio? (Do not round intermediate calculations. Enter the answer as a percent rounded to 2 decimal places.) Expected risk premium 6.35 % c-1. If the expected inflation rate is 3.10%, what are the approximate and exact expected real returns on the portfolio? (Do not round intermediate calculations. Enter the answers as a percent rounded to 2 decimal places.) 8.35 8 Approximate expected real return Exact expected real return 8.10 c-2. What are the approximate and exact expected real risk premiums on the portfolio? (Do not round intermediate calculations. Enter the answers as a percent rounded to 2 decimal places.) 3.25 Approximate expected real risk premium Exact expected real risk premium 3.00 X