Question: Problem 13-23 Portfolio Returns and Deviations [LO2] Consider the following information about three stocks: a-1. If your portfolio is invested 45 percent each in A

Problem 13-23 Portfolio Returns and Deviations [LO2] Consider the following information about three stocks: a-1. If your portfolio is invested 45 percent each in A and B and 10 percent in C, what is the portfolio expected return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a-2. What is the variance? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.) a-3. What is the standard deviation? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If the expected T-bill rate is 3.90 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.) c1. If the expected inflation rate is 3.50 percent, what are the approximate and exact expected real returns on the portfolio? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c-2. What are the approximate and exact expected real risk premiums on the portfolio? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) \begin{tabular}{|l|l|l|} \hline a-1. Portfolio expected return & & % \\ \hline a-2. Variance & & \\ \hline a-3. Standard deviation & & % \\ \hline b. Expected risk premium & & % \\ \hline c-1. Approximate expected real return & & % \\ \hline c-1. Exact expected real return & & % \\ \hline c-2. Approximate expected real risk premium & & % \\ \hline c-2. Exact expected real risk premium & % \\ \hline \end{tabular}
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
