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An exhaustive financial analysis has produced the following returns on two investments under three different scenarios: Expected Returns Scenario Probability Stock X Stock Y S1
An exhaustive financial analysis has produced the following returns on two investments under three different scenarios: Expected Returns Scenario Probability Stock X Stock Y S1 0.3 10% 8% S2 0.4 16% 15% S3 0.3 12% 20% (a) Calculate the expected return on each investment. (b) Calculate the standard deviations (?) for both X and Y. (c) Calculate the coefficient of variation (CV) for both X and Y. (d) If you were to create a portfolio consisting of 67% of Stock X and 33% of Stock Y, what will be the expected return (rP) and the standard deviation (?P) for your portfolio
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