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Business, 13.12.2021 01:00 dashaunpeele

Consider the following information on three stocks(20) State of
Economy

Probability of
State of Economy

Rate of Return
if State Occurs
Stock A Stock B Stock C
Boom 0.45 0.42 0.35 0.65
Normal 0.50 0.31 0.18 0.04
Bust 0.05 0.17 -0.17 -0.64

A portfolio is invested 35 percent each in stock A and stock B and 30 percent in stock C. What is the
expected risk premium on the portfolio if the expected T-bill rate is 3.3 percent?

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Answers: 2

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Consider the following information on three stocks(20) State of
Economy

Probabi...
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