Question

Consider the following information about three stocks:

State of Probability of Economy State of Economy Stock A Stock B Stock C Boom .25 .34 .46 .58 Normal .50 .14 .12 .10 Bust .25 .05 −.26 −.46 a-1. If your portfolio is invested 20 percent each in A and B and 60 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 3.40 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.) c-1. If the expected inflation rate is 3.00 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.)

Answer #1

consider the following information about three stocks:
Rate of Return If State Occurs
State of
Probability of
Economy
State of Economy
Stock A
Stock B
Stock C
Boom
.25
.30
.42
.54
Normal
.45
.12
.10
.08
Bust
.30
.03
−.24
−.44
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...

Consider the
following information about three stocks:
Rate of Return If State Occurs
State of
Probability of
Economy
State of Economy
Stock A
Stock B
Stock C
Boom
.30
.36
.48
.60
Normal
.40
.15
.13
.11
Bust
.30
.06
−.28
−.48
a-1.
If your portfolio is invested 25 percent each in A and B and 50
percent in C, what is the portfolio expected return? (Do
not round intermediate calculations and enter your answer as a
percent...

Consider the following information about three stocks: Rate of
Return If State Occurs State of Probability of Economy State of
Economy Stock A Stock B Stock C Boom .20 .24 .36 .55 Normal .55 .17
.13 .09 Bust .25 .00 −.28 −.45 a-1 If your portfolio is invested 40
percent each in A and B and 20 percent in C, what is the portfolio
expected return? (Do not round intermediate calculations. Enter
your answer as a percent rounded to 2...

Consider the following information on three
stocks:
Rate of Return If State OccursState of
EconomyProbability of State
of EconomyStock AStock BStock CBoom
.20 .20 .32 .54 Normal
.45 .18 .16 .14 Bust
.35 .02 −.34 −.42
a-1 If your portfolio is invested 40 percent each in A and B
and 20 percent in C, what is the portfolio expected return? (Do
not round intermediate calculations. Enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16.)
Portfolio expected return
%
a-2 What is the variance? (Do...

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
.15
.04
.33
.55
Normal
.60
.09
.13
.19
Bust
.25
.15
–.14
–.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? (Do not...

Consider the following information about three stocks:
Rate of Return If State Occurs
State of
Probability of
Economy
State of Economy
Stock A
Stock B
Stock C
Boom
0.20
0.24
0.36
0.58
Normal
0.50
0.20
0.18
0.16
Bust
0.30
0.04
?0.36
?0.45
a-1
If your portfolio is invested 40 percent each in A and B and 20
percent in C, what is the portfolio expected return? (Do
not round intermediate calculations. Enter the answer as a percent
rounded...

Consider the following information: Rate of Return if State
Occurs State of Probability of Economy State of Economy Stock A
Stock B Stock C Boom .10 .35 .40 .27 Good .60 .16 .17 .08 Poor .25
− .01 − .03 − .04 Bust .05 − .12 − .18 − .09 a. Your portfolio is
invested 30 percent each in A and C, and 40 percent in B. What is
the expected return of the portfolio? (Do not round intermediate
calculations...

Consider the following information:
Rate of Return if State Occurs
State of
Probability of
Economy
State of Economy
Stock A
Stock B
Stock C
Boom
.10
.35
.40
.27
Good
.60
.16
.17
.08
Poor
.25
−
.01
−
.03
−
.04
Bust
.05
−
.12
−
.18
−
.09
a.
Your portfolio is invested 30 percent each in A and C, and 40
percent in B. What is the expected return of the portfolio?
(Do not round...

Consider the following information:
Rate of Return if State Occurs
State of
Probability of
Economy
State of Economy
Stock A
Stock B
Stock C
Boom
.10
.35
.40
.27
Good
.60
.16
.17
.08
Poor
.25
−
.01
−
.03
−
.04
Bust
.05
−
.12
−
.18
−
.09
a.
Your portfolio is invested 30 percent each in A and C, and 40
percent in B. What is the expected return of the portfolio?
(Do not round...

***I ONLY NEED C2 ANSWERED PLEASE**
Consider the following information on three
stocks:
Rate of Return If State OccursState of
EconomyProbability of State
of EconomyStock AStock BStock CBoom .20 .20 .32 .54 Normal .45 .18
.16 .14 Bust .35 .02 −.34 −.42
a-1 If your portfolio is invested 40 percent each in A and B
and 20 percent in C, what is the portfolio expected return? (Do
not round intermediate calculations. Enter your answer as a percent
rounded to 2...

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