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The table below summarizes the returns of various assets (in %). Asset 5 Rainfall Table 4.3 Returns on Various Investments Market Return Condition Asset 1
The table below summarizes the returns of various assets (in %). Asset 5 Rainfall Table 4.3 Returns on Various Investments Market Return Condition Asset 1 Asset 2 Asset 3 Good 16 1 Average 9 10 10 Poor 3 4 19 15 16 10 4 Plentiful Average Poor Return Asset 4 16 10 4 Mean return 9 10 10 10 Variance 24 24 54 24 Standard deviation 4.9 4.9 7.35 4.90 "The alternative returns on each asset are assumed equally likely, and thus each has a probability of 10 24 4.9 Consider a portfolio P obtained by investing 60% of your wealth in asset 2 and 40% in asset 3. What is the variance of return for portfolio P, knowing that the covariance of returns between returns of assets 2 and 3 is -36? 0% O 1% O O 2% O 3%
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