101 25. Portfolio Returns and Deviations. Consider the following information on a portfolio of three stocks: 102 State of Economy Probability of State of Economy Stock A Rate of Return Stock B Rate of Return Stock C Rate of Return Boom Normal Bust .15 .60 .25 .02 .10 .16 .32 .12 -.11 .60 .20 -35 a. If your portfolio is invested 40 percent each in A and B and 20 percent in C, what is the portfolio's expected return? The variance? The standard deviation? b. If the expected T-bill rate is 3.75 percent, what is the expected risk premium on the portfolio? that the ratio of the risk premiums on two LOA