Portfolio expected return-variance and standard deviation

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Consider the following information on a portfolio of three stocks: State of Probability of Stock A Stock B Stock C Economy State of Economy Rate of Return Rate of Return Rate of Return

Boom .15 .04 .34 .48

Normal .53 .12 .24 .22

Bust .32 .18 − .23 − .37

a. If your portfolio is invested 36 percent each in A and B and 28 percent in C, what is the portfolio’s expected return, the variance, and the standard deviation? (Do not round intermediate calculations. Round your variance answer to 5 decimal places, e.g., 32.16161. Enter your other answers as a percent rounded to 2 decimal places, e.g., 32.16.) Expected return % Variance Standard deviation % b. If the expected T-bill rate is 4.35 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.)

Also, What is the Expected risk premium? ______%

Reference no: EM131555561

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