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The table below shows possible values in one year, V1 , with associated probabilities, p(V1) , for two securities that both have present value, V0

The table below shows possible values in one year, V1

, with associated probabilities, p(V1)

, for two securities that both have present value, V0

What is the expected return on investment with the lowest risk?


 

p(Vi) 30% 40% 30% ALFA V 70 120 170 p(Vi) 20% 70% 10% BETA V 70 120 180

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