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Question 2: Alecia is a financial investor who actively buys and sells in the securities market. Now she has a portfolio of all blue chips,
Question 2: Alecia is a financial investor who actively buys and sells in the securities market. Now she has a portfolio of all blue chips, including: $13 500 of Share A, $7600 of Share B, $14 700 of Share C, and $5 500 of Share D. Required: a) Compute the weights of the assets in Rachel's portfolio? b) Following is forecast for economic situation and Alecia's portfolio returns next year, calculate the expected return, variance and standard deviation of the portfolio. State of economy Mild Recession Growth Strong Growth Probability 0.35 0.45 0.20 Rate of returns - 5% 15% 30%
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