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The following statistics and estimates were compiled by FIN343 Bank regarding a proposed new branch office and the bank itself: Branch office expectedreturn= 17% Standard

The following statistics and estimates were compiled by FIN343 Bank regarding a proposed new branch office and the bank itself:

Branch office expectedreturn= 17%

Standard deviation of branch return= 9%

Existing bank's expectedreturn= 12%

Standard deviation of existing bank'sreturn= 6%

Branch asset value as a percentage of total bank assets= 20%

Correlation of net cash flows for branch and bank as awhole= +0.60

What will happen to FIN343's total expected return and overall risk if the proposed new branch project is adopted?

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