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2. You have two investment option: Common stocks of ACAR Co or STAR Co. The expectation of market about them are given below: ACAR Co
2. You have two investment option: Common stocks of ACAR Co or STAR Co. The expectation of market about them are given below: ACAR Co Economy Recession Normal Good Probability Expected Return 0,30 -0,15 0,40 0,15 0,30 0,25 STAR CO Economy Recession Normal Good Probability Expected Return 0,25 -0,20 0,50 0,10 0,25 0,30 a- Which one do you prefer? b- If you invest 40% of your money to ACAR and %60 percent to STAR common stocks , what will be risk and expected return of the new portfolio (? Please note that the correlation coefficient between the return of these companies are 0,33
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