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Please solve this in Excel and show the process. You are in the process of analyzing two stocks and the market portfolio. Your analysis shows
Please solve this in Excel and show the process.
You are in the process of analyzing two stocks and the market portfolio. Your analysis shows that there are five potential states of the economy. Here are the outcomes in each state: a. Please calculate the expected return of each stock and the market portfolio. b. Please calculate the variance of each stock and market portfolio return. c. Please calculate all the covariances (there are three of them). d. Please calculate the portfolio risk and return based on the following weights: e. The risk-free rate (rf) is 2.40% and you want to combine rf and rM in a portfolio. If you want to create the same return as 60%40% portfolio in part d. Based on that, what will be the decrease in portfolio risk (compared to part d)Step by Step Solution
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