Problem 13-23 Portfolio Returns and Devlations (L01, 2) Consider the following information about three stocks State of Probability of Rate of Return State Occurs Economy State of Economy Stock A Stock Stock C Boom 0.25 0.28 0.40 0.52 Normal 0.11 0.09 0.07 Bust 8.95 0.02 -0.22 -0.42 .-1. If your portfolio is invested 35% each in A and B and 30% in C. what is the portfolio expected return? (Do not round Intermediate calculations. Enter the answer at a percent rounded to 2 decimal places.) Portfolio expected return % 0-2 What is the variance? (Do not round Intermediate calculations. Round the final answer to 8 decimal places.) Variance .-3. What is the standard deviation? (Do not round Intermedlate calculations. Enter the answer os e percent rounded to 2 decimal places.) Standard deviation %6 b. If the expected T-bill rate is 3.20%. 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 1% c-1. If the expected inflation rate is 210%, 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 % - a The amount of time travellers at an airport spend with customs officers has a mean of =33 seconds and a standard deviation of o = 12 seconds. For a random sample of 30 travellers, what is the probability that their mean time spent with customs officers will be: Standard Normal Distribution Table a. Over 30 seconds? Round to four decimal places if necessary b. Under 35 seconds? ho Round to four decimal places if necessary c. Under 30 seconds or over 35 seconds? - a The amount of time travellers at an airport spend with customs officers has a mean of =33 seconds and a standard deviation of o = 12 seconds. For a random sample of 30 travellers, what is the probability that their mean time spent with customs officers will be: Standard Normal Distribution Table a. Over 30 seconds? Round to four decimal places if necessary b. Under 35 seconds? ho Round to four decimal places if necessary c. Under 30 seconds or over 35 seconds
