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Economic Probability Diamond Edward Boom 0.3 10% -12% Normal 0.5 7% 4% Recession 0.2 -3% 25% The risk free return is 3% What are the
| Economic | Probability | Diamond | Edward |
| Boom | 0.3 | 10% | -12% |
| Normal | 0.5 | 7% | 4% |
| Recession | 0.2 | -3% | 25% |
The risk free return is 3%
- What are the expected return and risk levels for each of the above three investments?
- If you were to construct a portfolio consisting of 40% of your funds in T-bills and 60% of your funds in Diamond, what would the portfolio risk and return be?
- If you were to construct a portfolio of 30% Diamond and 70% Edward, what would the expected return of this portfolio be
- What are the Covariance and Correlation Coefficient between Diamond and Edward?
- What would the risk level of the portfolio in question (c) be?
- What thewDandwE of the optimum risky portfolio and the Minimum Variance Portfolio?
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Recent Developments Of Mathematical Fluid Mechanics
Authors: Herbert Amann, Yoshikazu Giga, Hideo Kozono, Hisashi Okamoto, Masao Yamazaki
1st Edition
3034809395, 9783034809399
