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10% more than minimum! 3. Assume that you are considering selecting assets from among the following four candidates: Asset 1 Asset 2 Market Condition Market

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10% more than minimum! 3. Assume that you are considering selecting assets from among the following four candidates: Asset 1 Asset 2 Market Condition Market Condition Return Probability Return Probability 16 Good Average Poor Good Average Poor Asset 3 Asset 4 Market Condition Return Probability Rainfall Return Probability 20 Good Average Plentiful Average Light 12 Poor Assume that there is no relationship between the amount of rainfall and the condition of the stock market. A Solve for the expected return and the standard deviation of return for each sepa rate investment. B. Solve for the correlation coefficient and the covariance between each pair of investments. c. Solve for the expected return and variance of each of the portfolios shown below. Asset 3 Asset 4 Market Condition Return Probability Probability Good Average Poor Rainfall Plentiful Average Light Return 16 12 Assume that there is no relationship between the amount of rainfall and the condition of the stock market. A. Solve for the expected return and the standard deviation of return for each sepa- rate investment B. Solve for the correlation coefficient and the covariance between each pair of investments. C. Solve for the expected return and variance of each of the portfolios shown below. Portions Invested in Each Asset Asset 2 Asset 3 Portfolio Asset 1 Asset 4 2 de 30 do = D. Plot the original assets and each of the portfolios from Part C in expected return standard deviation space. nine for each of seven months

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