Returns on a portfolio of common stock and a portfolio of Treasury bills depend on the state of the economy, as shown below:

-translation of the table:

economic condition

Probability

market performance

treasury certificates

Recession

25%

-8.2%

3.5%

Normal

fifty%

12.3%

3.5%

Boom

25%

25.8%

3.5%

a) Calculate the expected returns on treasury bills and on the market.

b) Calculate the expected risk premium.

Condicin econmica Recesin Normal Auge Probabilidad 25% 50% 25% Rendimiento del mercado -8,2% 12,3% 25,8% Certificados de la tesorera 3,5% 3,5% 3,5%