Problem 13-23 Portfolio Returns and Deviations [L02] Consider the following information about three stocks Rate of Return If State Occurs State of Probability of Economy Economy Boom Normal Bust State of Stock A 30 40 30 .36 15 06 Stock B 48 13 28 Stock C 60 48 a-1. If your portfolio is invested 25 percent each in A and B and 50 percent in C, what is the portfolio expected return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a-2. What is the variance? (Do not round intermediate calculations and round your a-3. What is the standard deviation? (Do not round intermediate calculations and b. If the expected T-bill rate is 3.50 percent, what is the expected risk premium on the answer to 5 decimal places, e.g., .16161.) enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c-1. If the expected inflation rate is 3.10 percent, what are the approximate and exact expected real returns on the portfolio? (Do not round intermediate calculations 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 portfolio? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. a- 1. a- 2. 11.4501% Portfolio expected return Variance Standard deviation 0.09727 31.1901% 7.951 % 8.35 % 8.10 % 7.95 % 4.60 1% 3. b. Expected risk premium C- 1. Approximate expected real return Exact expected real return C- 2, Approximate expected real risk premium Exact expected real risk premium