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Header Q1 (25 marks) a) Consider the following information: State Probability of State 0.65 Stock X 0.07 Rate of Return Stock Y 0.15 Stock Z

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Header Q1 (25 marks) a) Consider the following information: State Probability of State 0.65 Stock X 0.07 Rate of Return Stock Y 0.15 Stock Z 0.33 Boom Bust 0.35 0.13 0.03 - 0.06 a. What is the expected return on an equally weighted portfolio of these three stocks? b. What is the variance of a portfolio invested 20% each in X and Y and 60% in 27

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