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Clear steps plz QUESTION 3 [20] Emma Dlamini is considering two investments and can only invest in either the shares of Company X or in
Clear steps plz
QUESTION 3 [20] Emma Dlamini is considering two investments and can only invest in either the shares of Company X or in the shares of Company Y. The following information regarding returns and probability distributions of returns is relevant: Share X Probability Return X 0.25 10% 0.50 15% 20% Share Y Probability Return Y 0.25 10% 0.30 20% 0.25 30% 0.20 30% 0.25 Required: a) What is the expected return of X and Y? (4) b) Calculate the standard deviations of X and Y's returns (4) c) What is the co-efficient of variation? (4) d) What would you recommend? Why? (4) e) Instead of Share Y offering a probability of 20% of achieving a 30% return, assume instead that the possible return is 40%. How would this affect the investment decision? (4)Step by Step Solution
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