uppose that Alexander Co., a U.S.-based MNC, is trying to decide the location of a new project in which they plan to invest. Alexander invest in he new project in either the United States or Germany. Upon completion, the project will comprise 50.00% of Alexander's total investeds, with the remaining 50.00% being invested in the United States. Forecasted information regarding the proposed project over a 5-year period, including the 50.00% of funds invested in the existing business, are shown in the following table: Existing Business 20.00% 0.1 Characteristics of Proposed Project Located in Located in United States Germany 30.00% 30.00% 0.06 0.1 Mean expected annual return on investment (alter taxes) Standard deviation of expected annual alter tax returns on investment Correlation of expected annual aftertax returns on investment with altertax return of existing 5 business 0.8 0.02 0.0018 0.0023 In the previous stage of this problem you found that the expected retums for either portfolio tial portfolio with the Germany-based project and the potential portfolio with the US based project - were identical. Thus, Alexander wishe 0.0078 re the risk involved with investing in each of the projects, as measured by the variance of their overall portfolio under each scenario 0.0058 If Alexander ests in the Germany Alexander invests in the 1.5. based project, the overall varance of their portfolio would be based project, the overall variance of their portfoho would be Grade 2 arch o 42F Clear M 1 DELL W BBB WARO PEG Y o P BE S D G H J K x V N N M Com