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Consider the following information: Invest 10% of your money in Asset A, 50% in Asset B, and 40% in Asset C: State Probability B Boom
Consider the following information: Invest 10% of your money in Asset A, 50% in Asset B, and 40% in Asset C: State Probability B Boom 0.4 5096 4096 3096 Bust 0.6 -20% 1096 596 1. What is the expected return and standard deviation for each asset? Expected return for asset A is Expected return for asset B is Expected return for asset Cis Standard deviation for asset A is Standard deviation for asset B is Standard deviation for asset Cis 2. What is the expected return and standard deviation for the portfolio? Expected return for the portfolio is Standard deviation for the portfolio is 3. Based on the information above, assume the beta for each assets A, B, and C is 0.2, 1.8, and 3.5 What is the portfolio beta ? 4. Which asset has highest systematic risk? 5. Which asset has highest total risk
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