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(10 pts) Consider two scenarios, w, with probability 1/4 and we with probability 3/4. Suppose that the return on a certain security is K (wi)
(10 pts) Consider two scenarios, w, with probability 1/4 and we with probability 3/4. Suppose that the return on a certain security is K (wi) = -4% in the first scenario and K1(w2) = 10% in the second scenario. If the return on another security is K2(wi) = -6% in the first scenario, find the return K (W2) in the other scenario such that the two secu- rities have the same risk
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