Asset	Outcome 1	Outcome 2	Outcome 3	E(ER)
1	12%	0%	6%	6%
2	12%	6%	0%	6%
3	0%	6%	12%	6%

13.

An analyst has made the following retun projections for each of three possible outcomes with an equal likelihood of occurence:

If the analyst constucts two-asset potfolios that are equally weighted, which pair of assets provides the least amount of isk reduction?

A Asset 1 and Asset 2

B Asset 1 and Asset 3

C Asset 2 and Asset 3

EXPLAIN USING THE FORMULAS OF VARIANCE, COVARIANCE AND EXPECTED RETURN