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The stock section of this portfolio is made up of mostly Blamo stock. Blamo can behave in three different ways over the next year depending
The stock section of this portfolio is made up of mostly Blamo stock. Blamo can behave in three different ways over the next year depending on the state of the world: 3. STATE GOOD OKAY BAD RETURN 12% 4% -5% PROBABILITY 30% 45% 25% N : A) B) c) What is the expected return of the stock? What is the variance of the stock? what is the Sharpe ratio of the stock if the risk-free rate is 5,4, or 2%? D) If another company sells its own stock, Whamo stock, which is designed to always have a Sharpe Ratio of 0.3, which stock Blamo or Whamo is preferred for the different risk-free rates and why
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