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Please show work! 1. A portfolio of nondividend-paying stocks earned a geometric mean return of 5.0% between January 1, 2001, and December 31, 2007. The

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1. A portfolio of nondividend-paying stocks earned a geometric mean return of 5.0% between January 1, 2001, and December 31, 2007. The arithmetic mean return for the same period was 6.0%. If the market value of the portfolio at the beginning of 2001 was $100,000, what was the market value of the portfolio at the end of 2007? Use the following scenario analysis for Stocks X and Y to answer Questions 2 through 5 Bear Market Bull Market 0.3 50% 10% Normal Morket Probability Stock X Stock Y 0.2 20% -15% 0.5 18% 20% 2. 3. 4. What are the expected returns for Stocks X and Y? What are the standard deviations of returns on Stocks X and Y? Assume that of your $10,000 portfolio, you invest $9,000 in Stock X and $1,000 in Stock Y What is the expected return on your portfolio? 5. What is the covariance and correlation of returns between stock X and stock Y

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