Given the following probability distributions for returns on stocks A, B, and C: Return Return Probability...

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Given the following probability distributions for returns on stocks A, B, and C: Return Return Probability State of Outcome 1 2 3 4 0.25 0.25 0.35 0.15 (b) Return on Stock A on Stock B 20% 20% 15% 10% 10% 15% 5% 5% on Stock C 5% 10% 15% 20% (a) You invest $6,000 of your own money in a portfolio composing of these three stocks. You take a long position of $4,000 in A, a long position of $3,000 in B, and a in C. Calculate the expected rate of return and standard deviation of your 3-stock portfolio. position of $ Assume that the inflation rate and risk free rate are, respectively, 3.5% and 4.5%, calculate the expected real rate of return, and the REAL risk premium, of your 3-stock portfolio constructed in part (a). Use the approximation version of the Fisher Equation in your calculations! Given the following probability distributions for returns on stocks A, B, and C: Return Return Probability State of Outcome 1 2 3 4 0.25 0.25 0.35 0.15 (b) Return on Stock A on Stock B 20% 20% 15% 10% 10% 15% 5% 5% on Stock C 5% 10% 15% 20% (a) You invest $6,000 of your own money in a portfolio composing of these three stocks. You take a long position of $4,000 in A, a long position of $3,000 in B, and a in C. Calculate the expected rate of return and standard deviation of your 3-stock portfolio. position of $ Assume that the inflation rate and risk free rate are, respectively, 3.5% and 4.5%, calculate the expected real rate of return, and the REAL risk premium, of your 3-stock portfolio constructed in part (a). Use the approximation version of the Fisher Equation in your calculations!

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