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How to do this question Consider the following details for two shares, Share A and B. (a) What is the expected return for each share?
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Consider the following details for two shares, Share A and B. (a) What is the expected return for each share? Formula:E(R)=PiRi (b) What is the risk for each share? Formula :=(RiE(R))2Pi (c) What is the expected return on a portfolio consisting of 40% in Share A and 60% in Share B? (d) What is the risk of the portfolio in (c)? Formula:=(RiE(RP))2Pi (e) Explain the principle of diversification using your answers from (a) to (d) aboveStep by Step Solution
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