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Saves Consider the following information about three stocks: State of Economy Boom Normal Bust Probability of State of Economy 8.30 0.48 2.30 Rate of Return
Saves Consider the following information about three stocks: State of Economy Boom Normal Bust Probability of State of Economy 8.30 0.48 2.30 Rate of Return if State Occurs Stock A Stock B Stock C 2.27 2.32 0.23 0.18 0.15 w.e1 -2.32 -2.48 0.55 0.052172 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.) Portfolio expected return 11.54 a-2 What is the variance? (Do not round Intermediate calculations. Round the final answer to 8 decimal places.) Variance 23. 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 5.10%, 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 C-1. If the expected Inflation rate is 3.10%, 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.) 261% Approximate expected real return Exact expected real return 6-2 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
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