Question
Consider an economy with two types of?firms, S and I. S firms all move together. I firms move independently. For both types of firms there
Consider an economy with two types of? firms, S and I. S firms all move together. I firms move independently. For both types of firms there is a 33 % probability that the firm will have a 28% return and a 67 % probability that the firm will have a ?8% return. What is the volatility? (standard deviation) of a portfolio that consists of an equal investment? in:
a. 21 firms of type? S?
b. 21 firms of type? I?
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Financial Accounting Tools for Business Decision Making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
6th Canadian edition
1118644948, 978-1118805084, 1118805089, 978-1118644942
