eBook The following equation can be used to compute the risk of a three-security portfolio as follows: wypox+ wypog? + wc oc? + 2WAWBPABO AOB +2wx You have decided to invest 40 percent of your wealth in Security A, 40 percent in Security B, and 20 percent in Security C. The following information is available about the possible returns from the three securities: Security A Security B Security C Return Probability Return Probability Return Probability 12% 0.50 0.55 16% 0.65 18 0.35 14 0.25 22 0.25 22 0.15 18 0.20 26 0.10 8% Compute the expected return of the portfolio and the risk of the portfolio if the correlations between returns from the three securities are 2.0465; ROCAS -0.60 Do not round Intermediate calculations. Round your answers to two decimal places three-security portfolio as follows: - w, + wg?? + we?? + 2 + 2w + 20 g wc P 2 2 2 Security A Security B Security C Return Probability Return Probability Return Probability 12% 0.50 8% 0.55 16% 0.65 18 0.35 14 0.25 22 0.25 22 0.15 18 0.20 26 0.10 Compute the expected return of the portfolio and the risk of the portfolio If the correlations between returns from the three securities are 2.0665; PDC45; and PC 0.60 Do not round intermediate calculations. Round your answers to two decimal places. Expected return of the portfolio: % Risk of the portfolio 9