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Risk and Expected Return of a 3 Asset Portfolio. Based on the following information regarding Stock Uno, Stock Dos and Stock Tres, Returns Economy

   

Risk and Expected Return of a 3 Asset Portfolio. Based on the following information regarding Stock Uno, Stock Dos and Stock Tres, Returns Economy Boom Good Poor Prob Uno Dos Tres 33.33% -2.000% 19.000% 4.000% 33.33% 4.000% 9.000% 4.000% 33.33% 18.000% -5.000% 4.000% 1. Calculate the expected return and standard deviation for the three-asset portfolio assuming the portfolio consists of the following weights: a) 1/3 of Uno, 1/3 of Dos, and 1/3 Tres (meaning equal amounts of each stock in the portfolio). b) 50% Uno, 40% Dos and 10% Tres c) 0% Uno, 0% Dos, 100% Tres 2. In which portfolio would you choose to invest? Which portfolio would you consider the least desirable portfolio of the 3 portfolios? Include a few sentences explaining your responses to both.

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1 Calculations a Equal weights of each stock 13 Uno 13 Dos 13 Tres Expected Return Uno 03333 2 067 D... blur-text-image

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