Problem 13-23 Portfolio Returns and Deviations (L01, 2) Consider the following information about three stocks: ped State of Economy Boom Normal Bust Probability of State of Economy 0.26 8.50 0.24 Rate of Return if State Occurs Stock A Stock B Stock 0.32 0.44 0.56 0.13 0.11 0.09 0.04 -0.25 -0.45 DOK int 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.) rences Portfolio expected return % a-2. What is the variance? (Do not round intermediate calculations. Round the final answer to 8 decimal places.) Variance 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 % b. If the expected T-bill rate is 3.40%, 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 Variance a-3. What is the standard deviation? (Do not round intermediate calculations. Enter the answer as a percent rounded to 2 decimal places.) ed Standard deviation % ok b. If the expected T-bill rate is 3.40%, 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 % ences c-1. If the expected inflation rate is 2.30%, 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.) % Approximate expected real return Exact expected real return % 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.) % % Approximate expected real risk premium Exact expected real risk premium 6 of 8 ENG C. aw i . IA