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Here are the expected returns on two stocks: Returns Probability X Y 0.3 30% - 20% 0.4 15% 15% 0.3 -20% 40% If you form
Here are the expected returns on two stocks:
Returns
Probability X Y
0.3 30% - 20%
0.4 15% 15%
0.3 -20% 40%
If you form a 50-50 portfolio of the two stocks, what are the portfolios expected return, standard deviation, and coefficient of variation?Compare them with those of stock X. Suggest your choice between the portfolio and stock X. Provide the reason for your choice.
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