10 points ou are an investment analyst working with "JPMorgan Case" and are very content with your ob advising investors. However, one fine morning, Jay the stupid" enters your office with a reposition to invest some money in three different securities, they being T-Bill, land and gold. ou being an expert in what you do, find the following probability distribution with respective tate of economy. Economy Probability T-BIRI Land Gold Recession 0.1 5.50% -20% 20% Below Average 0.2 5.50% -5% 10% Average 0.4 5.50% 10% 1% Above Average 0.2 5.50% 25% -7% Boom 0.1 5.50% 30% -15% - Assuming Jay is a risk averse investor, which are the two best assets you recommend him to buy? In Addition, Jay "the idiot" decides to invest in the following Asset Amount Beta T-Bill $40,000 0.4 Land $30,000 0.75 Gold $30,000 (1.25) Market risk premium 10% Calculate the required rate of return of the portfolio containing all the above three securities Also, suppose Jay "the stupid holds a diversified portfolio consisting of $7,500 investment in each of the 20 different stocks. The portfolio beta is 1.12. Now suppose you advise jay "the stupid" to sell two stocks with beta 1 and (0.8) respectively for $7,500 each and use the proceeds to buy other two stocks with beta 1.5 and 1.75 respectively. What is the required rate of return of the new portfolio