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please answer with in 1hr, with steps in detail. Thankyou. please answer as soon as possible. c. A firm is considering establishing a subsidiary in

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please answer with in 1hr, with steps in detail. Thankyou.

please answer as soon as possible.

c. A firm is considering establishing a subsidiary in either the US or the UK and will invest 40% of the firm's total invested funds. The annual expected return of the prevailing business is 10% and the standard deviation of these returns is 1.10. The firm has collected the following information If located in US If located in UK Mean Expected Annual Return 10% 8% Standard Deviation of Retums 20% 18% Correlation of Expected Returns on 0.85 0.05 investment with returns of prevailing business Required: Calculate the overall expected return and risk if the new subsidiary is established in US. Calculate the overall expected return and risk if the new subsidiary is established in UK On the basis of your calculations which place you recommend the firm to establish a new subsidiary. Discuss the importance of country risk analysis in establishing a new subsidiary and explain its common forms. i. iv

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