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question 1 question 1 question 2 (2) Consider the following information about three stocks: State of Economy Boom Normal Bust Probability of State of Economy

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question 1

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question 1

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question 2

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(2)

Consider the following information about three stocks: 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 @.26 0.38 9.55 2.21 0.19 0.17 8.05 -0.38 -0.46 a-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 imtermediate calculations. Enter the answer as a percent rounded to 2 decimal places.) Portfolio expected return % a-2. What is the variance? (Do not round intermediate calculations. Round the final answer to & 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 430%, 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.) Check my 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 4.30%, 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 % G-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.) 98 Approximate expected real risk premium Exact expected real risk premium Che Consider the following information about three stocks: State of Economy Boom Normal Bust Probability of State of Economy B.28 B45 0.35 Rate of Return if State Occurs Stock A Stock B Stock C 0.20 0.32 0.54 0.18 0.16 0.14 3.82 -0.34 -0.42 2-1. 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 6.28 % a-2. What is the variance? (Do not round intermediate calculations. Round the final answer to 8 decimal places.) Variance 004 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 20.94% b. If the expected T-bill rate is 4.00%, 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.) a-3. What is the standard deviation? (Do not round intermediate calculations. Enter the answer as a percent rounded to 2 decimal places.) Check m Standard deviation 20.94% b. If the expected T-bill rate is 4.00%, 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 228% C-1. If the expected inflation rate is 2.00%, 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 0.06% 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 Approximate expected real risk premium Exact expected real risk premium

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