Problem 13-23 Portfolio Returns and Deviations (LO1, 2) Consider the following information about three stocks: State...
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Problem 13-23 Portfolio Returns and Deviations (LO1, 2) Consider the following information about three stocks: State of Probability of State of Economy Rate of Return if State Occurs Stock A Economy Stock B Stock C Boom 0.26 0.32 0.44 0.56 Normal 0.50 0.13 0.11 0.09 Bust 0. 24 0.04 -0.25 -0.45 a-1. If your portfolio is invested 40% each in A and B and 20% in C, what is the portfolio expected return? (Do not round intermedia calculations. Enter the answer as a percent rounded to 2 decimal places.) Portfolio expected return 12.34 % a-2. What is the variance? (Do not round intermediate calculations. Round the final answer to 8 decimal places.) Variance a-3. What is the standard deviation? (Do not round intermediate calculations. Enter the answer as a percent rounded to 2 decimal places.) Standard deviation 1% Standard deviation b. If the expected T-bill rate is 3.40%, what is the expected risk premium on the portfolio? (Do not round intermediate calculations. Enter the answer as a percent rounded to 2 decimal places.) Expected risk premium c-1. If the expected inflation rate is 2.30%, what are the approximate and exact expected real returns on the portfolio? (Do not round intermediate calculations. Enter the answers as a percent rounded to 2 decimal places.) Approximate expected real return Exact expected real return C-2. What are the approximate and exact expected real risk premiums on the portfolio? (Do not round intermediate calculations. Enter the answers as a percent rounded to 2 decimal places.) Approximate expected real risk premium Exact expected real risk premium Problem 13-23 Portfolio Returns and Deviations (LO1, 2) Consider the following information about three stocks: State of Probability of State of Economy Rate of Return if State Occurs Stock A Economy Stock B Stock C Boom 0.26 0.32 0.44 0.56 Normal 0.50 0.13 0.11 0.09 Bust 0. 24 0.04 -0.25 -0.45 a-1. If your portfolio is invested 40% each in A and B and 20% in C, what is the portfolio expected return? (Do not round intermedia calculations. Enter the answer as a percent rounded to 2 decimal places.) Portfolio expected return 12.34 % a-2. What is the variance? (Do not round intermediate calculations. Round the final answer to 8 decimal places.) Variance a-3. What is the standard deviation? (Do not round intermediate calculations. Enter the answer as a percent rounded to 2 decimal places.) Standard deviation 1% Standard deviation b. If the expected T-bill rate is 3.40%, what is the expected risk premium on the portfolio? (Do not round intermediate calculations. Enter the answer as a percent rounded to 2 decimal places.) Expected risk premium c-1. If the expected inflation rate is 2.30%, what are the approximate and exact expected real returns on the portfolio? (Do not round intermediate calculations. Enter the answers as a percent rounded to 2 decimal places.) Approximate expected real return Exact expected real return C-2. What are the approximate and exact expected real risk premiums on the portfolio? (Do not round intermediate calculations. Enter the answers as a percent rounded to 2 decimal places.) Approximate expected real risk premium Exact expected real risk premium
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Related Book For
Human Anatomy and Physiology
ISBN: 978-0321927040
10th edition
Authors: Elaine N. Marieb, Katja Hoehn
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