If your portfolio is invested 35 percent each in A and B and 30 percent in C, wh
ID: 2761723 • Letter: I
Question
If your portfolio is invested 35 percent each in A and B and 30 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 13.58% What is the variance? (Do not round intermediate calculation and round your answer to 5 decimal places, e.g., 32. 16161.) Variance 0.05457 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 23.36% If the expected T-bill rate is 4.10 percent, what is the expected risk premium on the portfolio? (Do not round intermediate calculation and round your answer to 5 decimal places, e.g., 32. 16.) Expected risk premium 9.48% If the expected inflation rate is 3.70 percent, what are the approximate and exact expected real returns on the portfolio? (Do not round intermediate calculation and round your answer to 5 decimal places, e.g., 32. 16.) Approximate expected real return 9.88% Exact expected real return 9.48 What are the approximate and expected real risk premiums on the portfolio? (Do not round intermediate calculation and round your answer to 5 decimal places, e.g., 32. 16.) Approximate expected real risk premium 9.48% Exact expected real risk premium %Explanation / Answer
exact expected real risk premium = exact expected real return-((1+tbill rate)/(1+inflation rate)-1)*100
=9.48-((1+4.1/100)/(1+3.7/100)-1)*100 = 9.09%