Problem 11-25 Portfolio Returns and Deviations [LO 2] Consider the following information on a portfolio of three stocks: State of Probability of Stock A Stock B Economy State of Economy Rate of Return Rate of Return Boom .13 .02 32 Normal .55 .10 22 Bust 32 .16 -21 Stock C Rate of Return .50 .20 -35 Required: (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, and the standard deviation? (Do not round intermediate calculations. Round your variance answer to 6 decimal places (0.9. 32.16161) and input your other answers as a percentage rounded to 2 decimal places (0.9., 32,16).) Expected return Variance Standard deviation (b) If the expected T-bill rate is 4.25 percent, what is the expected risk premium on the portfolio? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Expected risk premium %