Consider the following information on a portfolio of three stocks: State of Economy Probability of State...
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Consider the following information on a portfolio of three stocks: State of Economy Probability of State of Stock A Stock B Stock C Economy Rate of Return Rate of Return Rate of Return Boom .13 Normal .53 .04 .12 .34 .58 .14 .22 Bust .34 .18 -13 -37 a. If your portfolio is invested 36 percent each in A and B and 28 percent in C, what is the portfolio's expected return, the variance, and the standard deviation? (Do not round intermediate calculations. Round your variance answer to 5 decimal places, e.g., 32.16161. Enter your other answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. If the expected T-bill rate is 3.85 percent, what is the expected risk premium on the portfolio? (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 % % % Consider the following information on a portfolio of three stocks: State of Economy Probability of State of Stock A Stock B Stock C Economy Rate of Return Rate of Return Rate of Return Boom .13 Normal .53 .04 .12 .34 .58 .14 .22 Bust .34 .18 -13 -37 a. If your portfolio is invested 36 percent each in A and B and 28 percent in C, what is the portfolio's expected return, the variance, and the standard deviation? (Do not round intermediate calculations. Round your variance answer to 5 decimal places, e.g., 32.16161. Enter your other answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. If the expected T-bill rate is 3.85 percent, what is the expected risk premium on the portfolio? (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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