Question
The management of Dandin Company is considering two choices for the best of investment portfolio that is either (1) a combination of financial assets A
The management of Dandin Company is considering two choices for the best of investment portfolio that is either (1) a combination of financial assets A and B or (2) a combination of financial assets A and C. The planned investment is 50 per cent for each asset component in each portfolio. The following are the estimated returns for all the three types of financial assets: Table 1: Expected Return (%) of Financial Assets Year A B C 2003 12 16 12 2004 14 14 14 2005 16 12 16 1)Calculate the expected return for each portfolio. 2)Calculate the standard deviation for each portfolio. 3)Choose the portfolio that Dandin Company should invest.
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