2 14 Consider the following information on a portfolio of three stocks: points Skipped State of...
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2 14 Consider the following information on a portfolio of three stocks: points Skipped State of Probability of State Economy of Economy Stock A Rate of Return Stock B Rate of Return Stock C Rate of Return Boom .12 .03 Normal Bust .54 34 .11 .17 .33 23 .22 .49 .21 -.36 eBook Hint Print References a. If your portfolio is invested 38 percent each in A and B and 24 percent in C, what is the portfolio's expected return, the variance, and the standard deviation? Note: Do not round intermediate calculations. Round your variance answer to 5 decimal places, e.g., .16161. Enter your other answers as a percent rounded to 2 decimal places, e.g., 32.16. b. If the expected T-bill rate is 4.3 percent, what is the expected risk premium on the portfolio? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Expected return Variance % Standard deviation % b. Expected risk premium % 2 14 Consider the following information on a portfolio of three stocks: points Skipped State of Probability of State Economy of Economy Stock A Rate of Return Stock B Rate of Return Stock C Rate of Return Boom .12 .03 Normal Bust .54 34 .11 .17 .33 23 .22 .49 .21 -.36 eBook Hint Print References a. If your portfolio is invested 38 percent each in A and B and 24 percent in C, what is the portfolio's expected return, the variance, and the standard deviation? Note: Do not round intermediate calculations. Round your variance answer to 5 decimal places, e.g., .16161. Enter your other answers as a percent rounded to 2 decimal places, e.g., 32.16. b. If the expected T-bill rate is 4.3 percent, what is the expected risk premium on the portfolio? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Expected return Variance % Standard deviation % b. Expected risk premium %
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