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Use the following probability distribution. a) Find the expected rate of return on Stock X. (3 pts) b) Find the expected rate of return on
Use the following probability distribution. a) Find the expected rate of return on Stock X. (3 pts) b) Find the expected rate of return on Stock Y. (3 pts) c) Find the standard deviation of Stock X. (3 pts) d) Find the standard deviation of Stock Y. (3 pts) e) Find the covariance between Stock X and Stock Y. (3 pts) Suppose that you construct a two-stock portfolio as follows: f) Find the portfolio's expected rate of return. (3 pts) g) Find the portfolio's standard deviation. (3 pts) h) Compare standard deviations of Stock X, Stock Y, and your portfolio. Explain your portfolio's risk in terms of diversification. ( 3 pts) Use the following probability distribution. a) Find the expected rate of return on Stock X. (3 pts) b) Find the expected rate of return on Stock Y. (3 pts) c) Find the standard deviation of Stock X. (3 pts) d) Find the standard deviation of Stock Y. (3 pts) e) Find the covariance between Stock X and Stock Y. (3 pts) Suppose that you construct a two-stock portfolio as follows: f) Find the portfolio's expected rate of return. (3 pts) g) Find the portfolio's standard deviation. (3 pts) h) Compare standard deviations of Stock X, Stock Y, and your portfolio. Explain your portfolio's risk in terms of diversification. ( 3 pts)
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