There are three securities in the market. The following chart shows their possible payoffs: State .15 Probability Return on of Outcome Security 1 .192 142 .092 .042 Return on Security 2 .192 .092 142 35 Return on Security 3 .042 .092 .142 .192 WN .042 a-1. What is the expected return of each security? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Expected return Security 1 Security 2 Security 3 a-2. What is the standard deviation of each security? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Standard deviation Security 1 Security 2 Security 3 b-1. What is the covariances between the pairs of securities? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 6 decimal places. (e.g., 32.161616)) Covariance Security 1 & 2 Security 1 & 3 Security 2 & 3 b-2. What is the correlations between the pairs of securities? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 4 decimal places. (e.g., 32.1616)) Correlation Security 1 & 2 Security 1 & 3 Security 2 & 3 C-1. What is the expected return of a portfolio with half of its funds invested in Security 1 and half in Security 2? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Expected return Security 1 & 2 C-2. What is the standard deviation of a portfolio with half of its funds invested in Security 1 and half in Security 2? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Standard deviation Security 1 & 2 d-1. What is the expected return of a portfolio with half of its funds invested in Security 1 and half in Security 3? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Expected return Security 1 & 3 d-2. What is the standard deviation of a portfolio with half of its funds invested in Security 1 and half in Security 3? (Leave no cells blank - be certain to enter "0" wherever required.) Standard deviation Security 1 & 3 e-1. What is the expected return of a portfolio with half of its funds invested in Security 2 and half in Security 3? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Expected return Security 2 & 3 of e-2. What is the standard deviation of a portfolio with half of its funds invested in Security 2 and half in Security 3? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Standard deviation Security 2 & 3
