If your portfolio is invested 35 percent each in A and B and 30 percent in C, wh

Question

If your portfolio is invested 35 percent each in A and B and 30 percent in C, what is the portfolio expected return? (Round your answer to 2 decimal places. (e.g., 32.16))

What is the variance? (Do not round intermediate calculations and round your final answer to 5 decimal places. (e.g., 32.16161))

What is the standard deviation? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

If the expected T-bill rate is 4.50 percent, what is the expected risk premium on the portfolio? (Round your answer to 2 decimal places. (e.g., 32.16))

If the expected inflation rate is 4.00 percent, what are the approximate and exact expected real returns on the portfolio? (Round your answers to 2 decimal places. (e.g., 32.16))

What are the approximate and exact expected real risk premiums on the portfolio? (Round your answers to 2 decimal places. (e.g., 32.16))

Explanation / Answer

Boom: E(Rp) = .35(.34) + .35(.46) + .30(.50) = .43 or 43%

                        Normal :    E(Rp) = .35(.25) + .35 (.23) + .30(.20) = .228 or 22.8%

                        Bust :   E(Rp) = .35(.03) + .35 (

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects