LO 1 LO 2 25. Portfolio Returns and Deviations Consider the following information on a portfolio of three stocks: 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 .04 .09 .33 .13 -.14 .55 .19 .15 -28 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? If the expected T-bill rate is 3.75 percent, what is the expected risk premium on the portfolio? b