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In light of such a predictable gos (i-e, wealth creation), they announce the creation of avaluable, but risky portfolios the GOLD portfolio-NE market the COLD

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In light of such a predictable gos (i-e, wealth creation), they announce the creation of avaluable, but risky portfolios the GOLD portfolio-NE market the COLD Fortfolio, the following information becomes relevant. Rick-Free Rate Economy Condition Probability Stocko SOCAL -63-251 -8-207 Bad -12-70 -4 3086 Neutral Good 29-3536 Exuberant 2045 Capital Allocations dc- In light of the information above, compute the expected values and standard deviations of stocka G, 0, L and D 1d- By considering the stocks separately, which one should be chosen for investment purposes? Why? Be. In light of the information above, calculate the expected return and standard deviation of the GOLD Fortfolio [hint: while both ways are. work with a new random variable rather than many covariance terms-.]

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