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Explain how you get expected return and how you got each number to get there. No excel sheet plz and do B too plz 2.
Explain how you get expected return and how you got each number to get there. No excel sheet plz and do B too plz
2. Suppose you have $1000 to invest on two kinds of assets X and Y. Asset X is risk free and gives you a return rate of 10%. Asset Y is risky. It gives you a return rate of 10%, while in additional to that, it has 0.5 probability of earning 10% capital gain, and 0.5 probability of getting10% capital loss. Assume that you invest $B on Y and the remaining money on X. (a) Write down the expected return. (b) Write down the variance of your return. (hint: the result will contain B)Step by Step Solution
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