$$

a$.$ What are her expected returns and the risk from her investment in the three assets? How do they compare with investing in asset $M$ alone? Hint: Find the standard deviations of asset $M$ and of the portfolio equally invested in assets $M,N,$ and $O.$

b$.$ Could Sally reduce her total risk even more by using assets $M$ and $N$ only, assets $M$ and $O$ only, or assets $N$ and O only? Use a $50/50$ split between the asset pairs, and find the standard deviation of each asset pair.

Data table

$($Click on the following icon in order to copy its contents into a spreadsheet.$)$

$\backslash$table$[[$States$,$Probability,Asset M Retum,Asset N Return,Asset O Return$],[$Boom$,27\%,12\%,22\%,0\%$