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I need help on 30 b Diversifying Portfolios An investor decides to create a portfolio that initially will contain two stocks: Wal-Mart and Viacom. He

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Diversifying Portfolios An investor decides to create a portfolio that initially will contain two stocks: Wal-Mart and Viacom. He expects the Wal-Mart stock to have an annual return of 10% and the Viacom stock to have an annual return of 15%. If he invests equally in both stocks, what will be his expected annual return on the portfolio? How should he divide his investment in order to realize an annual return of 14% on his portfolio! Diversifying Portfolios An investor decides to create a portfolio that initially will contain four stocks: Boeing, Apple Computers, Aetna, and Caterpillar. She expects the Boeing stock to have an annual return of 25%, the Apple Computers stock to have an annual return of 18%, the Aetna stock to have an annual return of 8%, and the Caterpillar stock to have an annual return of 10%. If she invests equally in all stocks, what will be her expected annual return on the portfolio? If she wants to keep half her investment evenly split between Apple Computer and Aetna, how should she divide the remaining half of her investment between the other two stocks in order to realize an annual return of 17.75% on her portfolio? Discussion and Writing Make up a game different than any given in the text that is favorable to the player. Look up the rules for a lottery and discuss the expected value of a ticket. Refer to Example 8. As manager, would you have 11 or 12 luxury cars available to rent? Provide a rationale for your decision. Notice that the 12th car only generates $1 more in profit than the 11 cars do

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