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State of Economy Probability StockA StockB StockC Boom .5 .2 .35 .6 Normal .3 .15 .12 .05 Bust .2 .01 -.25 -.50 e. If the

State of Economy	Probability	StockA	StockB	StockC
Boom	.5	.2	.35	.6
Normal	.3	.15	.12	.05
Bust	.2	.01	-.25	-.50

e. If the expected inflation rate is 2.50%, what are the approximate and exact expected real returns on the portfolio?

f.If the expected T-Bill rate is 5% and the expected inflation rate is 2.50%, what are the approximate and exact expected real risk premiums on the portfolio?

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