Consider the following information on three stocks:

Rate of Return If State OccursState of EconomyProbability of State

of EconomyStock AStock BStock CBoom .20 .34 .46 .50 Normal .40 .25 .23 .20 Bust .40 .03 −.25 −.42

**a-1** If your portfolio is invested 35 percent each in A and B and 30 percent in C, what is the portfolio expected return? **(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)**

Portfolio expected return %

**a-2** What is the variance? **(Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161.)**

Variance

**a-3** What is the standard deviation? **(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)**

Standard deviation %

**b.** If the expected T-bill rate is 4.50 percent, what is the expected risk premium on the portfolio? **(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)**

Expected risk premium %

**c-1** If the expected inflation rate is 4.00 percent, what are the approximate and exact expected real returns on the portfolio? **(Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)**

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 your answers as a percent rounded to 2 decimal places, e.g., 32.16.)**

Approximate expected real risk premium %Exact expected real risk premium %

### Recently Asked Questions

- XYZ Corp. is designing a product layout for a new product. They plan to use this production line 12 hours a day in order to meet forecasted demand of 1000

- I do not know where to start for solving this problem. It costs C(x) = ï»¿ \sqrt{x} ï»¿ dollars to produce x golf balls. What is the marginal production

- I have posted a question to tutors as shown by the photo below