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Consider the following two assets with probability of return = P i and return = R i . a. Calculate the expected return for each
Consider the following two assets with probability of return = Pi and return = Ri.
a. Calculate the expected return for each and the standard deviation.
b.Which assetcarries the greatest risk? Why?
Asset A | Asset B | ||
Pi | Ri | Pi | Ri |
0.40 | 12.0% | 0.20 | 11.5% |
0.50 | 8.5% | 0.50 | 10.0% |
0.10 | -2.0% | 0.30 | 0.0% |
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