Q8.31. The following represents the probability dis- tribution for the rates of return for next month: Compute

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Q8.31. The following represents the probability dis- tribution for the rates of return for next month:

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Compute by hand (and show your work) for all the following questions. 1. What are the risks and rewards of P and M? 2. What is the correlation of M and P? 3. What is the market beta of P? 4. If you were to hold 1/3 of your portfolio in the risk-free asset, and 2/3 in portfolio P, what would its market beta be?

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