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thank you so much !!!!!!! 2. Consider the following information on the three stocks A and B and State of Probability of Rate of Return
thank you so much !!!!!!!
2. Consider the following information on the three stocks A and B and State of Probability of Rate of Return il State occurs Economy State of economy Stock A Stock B Stocka Boom 0.35 055 0.35 0.4 Normal 0.5 0.35 20 02 0.35 pts Bust 0.15 0.15 0.75 0 3 Portfolio P is invested 45% in stock A, 55% in stock B Portfolio Q is invested 45% in stock c, and 55% in stock B The risk-free rate is 3%, and the market risk premium is 6%. 71 FINAL 2020.2021 a b Calculate Portfolio P's expected return, and portfolio Q's expected return. Assume that CAPM holds true for the three stocks, meaning the expected returns of each stock truly reflects the level of risk embedded in it. Which stock has the highest systematic risk? Calculate each portfolio's total risks. Comment on the comparative total risks of Portfolio P and Portfolio Q Provide your answer hereStep by Step Solution
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