Question
3. The table below gives the probability of different returns for three different assets. Using this table, calculate the following: a. The expected return
3. The table below gives the probability of different returns for three different assets. Using this table, calculate the following: a. The expected return of each asset b. The standard deviation of returns of each asset c. The coefficient of variation of each asset d. Based on your answers to B) and C) above, which asset has the highest total risk and highest relative risk? Asset A Asset A Asset B Probability Return Probability Asset B Return Asset C Probability Asset C Return 0.3 5 0.1 0.4 8 0.3 0.3 9 0.5 0.1 2822 25 0.1 4 20 0.8 5 15 0.1 6 14
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Quantitative Investment Analysis
Authors: Richard A. DeFusco, Dennis W. McLeavey, Jerald E. Pinto, David E. Runkle
3rd edition
111910422X, 978-1119104544, 1119104548, 978-1119104223
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