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Asset D Asset C Rate of Return Probability Rate of Return Probability 10% 30% 5% 40% 15% 40% 15% 20% 20% 30% 25% 40% For
Asset D | Asset C | ||
Rate of Return | Probability | Rate of Return | Probability |
10% | 30% | 5% | 40% |
15% | 40% | 15% | 20% |
20% | 30% | 25% | 40% |
For each asset, compute
(a) the expected rate of return.
(b) the standard deviation of the expected return.
(c) the coefficient of variation of the return.
(d) Which asset should you select?
If you invested 60% of your money in asset D and 40% in asset C, for the portfolio, compute
(e) the expected rate of return.
(f) the standard deviation of the expected return.
(g) the coefficient of variation of the return.
(h) interpret your answer with 68.2% confidence.
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