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Benefits of diversification. Sally Rogers has decided to invest her wealth equally across the following three assets: E. What are her expected returns and the
Benefits of diversification. Sally Rogers has decided to invest her wealth equally across the following three assets: E. What are her expected returns and the risk from her investment in the three assets? How do they compare with investing in asset Malone? Hint: Find the standard deviations of asset M and of the portfolio equally invested in assets M, N, and O. What is the expected return of investing equally in all three assets M, N, and O? 9.63 % (Round to two decimal places.) What is the expected return of investing in asset Malone? 8.16 % (Round to two decimal places.) What is the standard deviation of the portfolio that invests equally in all three assets M, N, and O? | % (Round to two decimal places.) Data Table (Click on the following icon in order to copy its contents into a spreadsheet.) States Boom Normal Recession Probability 27% 50% 23% Asset M Return 11% 9% 3% Asset N Return 22% 13% 2% Asset O Return 3% 9% 11% Print Done
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