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Sam decides to invest $300,000 in stock A and $100,000 in stock B. He has forecast the possible returns for A and B, which will
Sam decides to invest $300,000 in stock A and $100,000 in stock B. He has forecast the possible returns for A and B, which will vary according to the state of the economy. The projections are as follows: Probability (%) 30 40 30 Economy RA (%) RB (%) Strong 21 9 Average 10 18 Weak -5 3 + Given this information: What is the expected return of Sam's portfolio? ii. What is the risk of Sam's portfolio
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