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Risk and return question 1. Use the following information to answer the questions. State Probability Stock A return Stock B return Good 0.3 Normal 0.6

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1. Use the following information to answer the questions. State Probability Stock A return Stock B return Good 0.3 Normal 0.6 Bad 0.1 8% 2% -3% 5% 1% a. Given that you form a portfolio by investing $4,000 in Stock A and $1,000 in Stock B, what is the expected return on your portfolio? b. What is the variance and standard deviation of your portfolio? c. Suppose that Stock A has a beta of 1.5 and Stock B has a beta of 0.8. What is the beta for your portfolio

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