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Mrs Daisy is considering two securities, A and B, and the relevant information is given below: State of Economy Probability Retrun on Security A (%)
- Mrs Daisy is considering two securities, A and B, and the relevant information is given below:
| State of Economy | Probability | Retrun on Security A (%) | Return on Security B (%) |
| Bear | 0.6 | 3.00% | 6.50% |
| Bull | 0.4 | 15.00% | 6.50% |
- Calculate the expected returns and standard deviations of security A and security B. (5 marks)
- Explain how diversification can reduce the unsystematic risk of a given portfolio? (3 marks)
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Valuing Mining Companies A Guide To The Assessment And Evaluation Of Assets Performance And Prospects
Authors: Charles Kernot
1st Edition
1855734354,1782420096
