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Suppose the risk-free asset (F) earns a return of 7%. A risky portfolio Prince earns the following returns depending on the state of the economy,

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Suppose the risk-free asset (F) earns a return of 7%. A risky portfolio Prince earns the following returns depending on the state of the economy, as shown in the table below. State of economy Prob. of state Portfolio Prince Recession 2096 1596 INormal 16096 1596 Boom 2096 4596 Chris Wallace forms a portfolio CW, by investing 80% in portfolio Prince and the remaining in the risk-free asset F. What is portfolio Cw's standard deviation of returns? O 35.5896 O 18.9796 O 15.1896 O 11.2296

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