Suppose you observe the following situation: 10 Rate of Return if State Occurs State of Economy Bust Normal Boom Probability of State 0.25 0.60 0.15 Stock A -0.08 0.13 0.48 Stock B -0.05 0.14 0.29 a. Calculate the expected return on each stock. (Round your answers to 2 decimal places. (e.g., 32.16)) Expected return Stock A Stock B b. Assuming the capital asset pricing model holds and stock A's beta is greater than stock B's beta by 0.25, what is the expected market risk premium? Expected market risk % premium Consider the following information: Rate of Return if State Occurs Stock A Stock C State of Probability of State of Economy Economy Boom 0.15 Good 0.55 Poor 0.25 Bust 0.05 int 0.35 0.16 - 0.01 - 0.12 Stock B 0.45 0.10 - 0.06 - 0.20 0.27 0.08 -0.04 -0.09 a. Your portfolio is invested 30 percent each in A and C, and 40 percent in B. What is the expected return of the portfolio? (Round your answer to 2 decimal places. (e.g.. 32.16)) Expected return % b-1 What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places. (e.g., 32.16161)) Variance b-2What is the standard deviation? (Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16)) Standard 1%