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Amber Limited has been formed to undertake Investments opportunities in a portfolio made up of two projects B and C. The probability distribution and the
Amber Limited has been formed to undertake Investments opportunities in a portfolio made up of two projects B and C. The probability distribution and the returns of the two projects are given below
Probability Project Returns
B C
0.3 14% 13%
0.5 20% 7%
0.2 15% 5%
Amber has invested 60% of his resources in Project B and 40% in Project C
Required
- What is the expected return of the portfolio ( 2 Marks)
- Calculate the covariance and correlation of the portfolio ( 3 Marks)
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