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Assume that there are two risky assets A and B, whose returns depend on the state of the economy according to the following table: State
Assume that there are two risky assets A and B, whose returns depend on the state of the economy according to the following table:
State | probability | Return of A (in %) | Return of B (in %) |
State X | p=o,2 | 4% | 10% |
State Y | p=0,7 | 5% | 0% |
State Z | p=0,1 | 7% | -5% |
C- calculate the expected return for a portfolio consisting of 30% asset A and 70% asset b
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