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##### 13.Portfolio Returns and Deviations Consider the...

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13.Portfolio Returns and Deviations Consider the following information on three stocks: Rate of Return if State Occurs State of Economy Probability of State of Economy Stock A Stock B Stock C Boom .35 .24 .36 .55 Normal .50 .17 .13 .09 Bust .15 .00 ?.28 ?.45 Required: (a) If your portfolio is invested 40 percent each in A and B and 20 percent in C, the portfolio expected return is ___ percent. (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16.) The variance is ___(Round your answer to 5 decimal places. (e.g., 32.16125.) and standard deviation is ___ percent. (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16.)) (b) If the expected T-bill rate is 3.80 percent, the expected risk premium on the portfolio is ____percent. (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16.)) (c) If the expected inflation rate is 3.50 percent, the approximate and exact expected real returns on the portfolio are ___percent and ___percent, respectively. The approximate and exact expected real risk premiums on the portfolio are ___percent and ___percent, respectively. (Do not include the percent signs (%). Round your answers to 2 decimal places. (e.g., 32.16.)),Please return answer in excel format. Thank you.

Paper#8574 | Written in 18-Jul-2015

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