What is the expected risk premium on the portfolio

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Reference no: EM131535252

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 .14 .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 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 3.8 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.) Expected risk premium %

Reference no: EM131535252

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