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 | .28 | .40 | .56 | ||||||||
Normal | .45 | .22 | .20 | .18 | ||||||||
Bust | .35 | .00 | −.20 | −.48 | ||||||||
a-1 |
If your portfolio is invested 30 percent each in A and B and 40 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 not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161.) |
Variance |
a-3 |
What is the standard deviation? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
Standard deviation | % |
b. |
If the expected T-bill rate is 4.20 percent, what is the expected risk premium on the portfolio? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
Expected risk premium | % |
c-1 |
If the expected inflation rate is 3.80 percent, what are the approximate and exact expected real returns on the portfolio? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
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 your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
Approximate expected real risk premium | % |
Exact expected real risk premium | % |
Consider the following information about three stocks: Rate of Return If State Occurs State of...
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 .28 .40 .56 Normal .45 .22 .20 .18 Bust .35 .00 −.20 −.48 a-1 If your portfolio is invested 30 percent each in A and B and 40 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 about three stocks: Rate of Return If State Occurs State of Probability of State of Economy Economy Stock A .32 Stock C .56 Boom Normal Bust Stock B .44 11 -25 26 .50 24 .09 .04 -.45 a-3 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 and enter your answer as a percent rounded to...
Consider the following information about three stocks: Rate of Return If State Occurs State of Probability of State of Economy 22 Economy Stock A Stock B Stock C Boom 30 23 42 21 58 19 Normal 46 Bust 32 01 .22 50 a-1. If your portfolio is invested 25 percent each in A and B and 50 percent in C, what is he portfolio expected return? (Do not round Intermedlate calculations and enter your answer as a percent rounded to...
Rate of Return If State Occurs State of Economy Boom Normal Bust Probability of State of Economy .20 .50 .30 Stock B .38 Stock A .26 .10 .01 Stock C .50 .08 .06 -.20 -.40 a-1If your portfolio is invested 30 percent each in A and B and 40 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 %...
Consider the following information about three stocks: Rate of Return If State Occurs State of Probability of Economy Economy Boom Normal Bust State of Stock B 56 .14 -.46 25 45 .30 25 .22 .30 .30 c-1. If the expected inflation rate is 4.30 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...
onsider the following information about three stocks: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Stock C Boom 0.20 0.20 0.32 0.54 Normal 0.45 0.18 0.16 0.14 Bust 0.35 0.02 −0.34 −0.42 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 intermediate calculations. Enter the answer as a percent rounded to 2 decimal places.)...
Consider the following information on a portfolio of three stocks: Probability of State of Economy State of Economy Boom Normal Bust Stock A Stock B Stock C Rate of Return Rate of Return Rate of Return 47 .25 .23 -24 - 38 .05 .35 .52 34 25 23 a. If your portfolio is invested 42 percent each in A and B and 16 percent in C, what is the portfolio's expected return, the variance, and the standard deviation? (Do not...
Consider the following information on a portfolio of three stocks Probability of State of State of Stock A Stock B Stock C Economy Rate of Return Rate of Return Rate of Return Economy 14 Boom 03 .33 .59 Normal 54 11 13 21 Bust .32 17 -12 -36 a. If your portfolio is invested 38 percent each in A and B and 24 percent in C, what is the portfolio's expected return, the variance, and the standard deviation? (Do not...
Consider the following information on a portfolio of three stocks: State of Probability of State of Economy Economy .13 Stock A Stock B Stock C Rate of Return Rate of Return Rate of Return .50 .20 .16 -21 Boom Normal .32 .02 10 .55 .32 Bust -35 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...
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 .13 .10 .35 .42 Normal .52 .18 .30 .28 Bust .35 .19 –.29 –.38 Required: (a) If your portfolio is invested 42 percent each in A and B and 16 percent in C, what is the portfolio’s expected return, the variance, and the standard deviation? (Do...