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Q3. A portfolio consists of $100,000 in share A that yield 5% and $150,000 in share B with an expected return of 8%. Share A

Q3. A portfolio consists of $100,000 in share A that yield 5% and $150,000 in share B with an expected return of 8%. Share A has a variance of 2% and share B has a variance of 3%. The covariance between returns is 0.00782.

  1. What is the expected return for this $250,000 portfolio? (1 Mark)

b. What is the variance of the portfolio? (1 Mark)

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