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answer the following question. I need help with steps by step and excel formulas. thank you. 6) An investor holds a portfolio of stocks and

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answer the following question. I need help with steps by step and excel formulas. thank you.

image text in transcribed

6) An investor holds a portfolio of stocks and is considering investing in the DBB Company. The firm's prospects look neutral and you estimate the following probability distribution of possible returns: Conditions Recession Below Average Average Above Average Boom 0.10 0.20 0.40 0.20 0.10 Returns on DBB -30% -15% 15% 28% 40% Returns on DVI -15% 8% 22% a) b) c) d) How much is the expected return for DBB? How much is the coefficient of variation for DBB? Now let's say you want to add another asset, DVI, to your portfolio. You sell 30% of DBB to purchase DVI. How much is your expected return for this portfolio? How much is the coefficient of variation for the new portfolio?

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