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Consider two assets X and Y , each of which costs $100 to purchase. After one year, X pays out $130 with probability p and
Consider two assets X and Y , each of which costs $100 to purchase. After one year, X pays out $130 with probability p and 75 with probability 1 p. Asset Y pays out $60 with probability p and $200 with probability 1 p
1-A) Find the value of p such that the two assets have identical expected returns
1-B)Given this value of p, calculate the standard deviation of the return of these two assets.
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