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Benefits of diversification. Sally Rogers has decided to invest her wealth equally across the fallowing three assets. What are her expected returns and the risk
Benefits of diversification. Sally Rogers has decided to invest her wealth equally across the fallowing three assets. What are her expected returns and the risk from her investment in the three assets? How do they compare with investing in asset M alone? Hint: Find the standard deviations of asset M and of the portfolio equally invested in assets M, N, and O. States Boom Normal Recession Asset M Retur Asset N Return 33% 48% 19% 14% 11% 2% 23% 16% 3% Asset O Retu 2% 11% 14% What is the expected return of investing in asset M alone? 10.28 % {Round to two What is the stancard deviation of the portolio that invests equally in all three assets M, N, and O 2.54 % (Round to two decimal places.) What is the slandard deviatin of asset M? decimal places.) (Round to tvo decimal places.)
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