What are her expected returns and the risk from her investment in the three assets? How do they compare with investing in asset M alone?

Hint:

Find the standard deviations of asset M and of the portfolio equally invested in assets M, N, and O.

What is the expected return of investing equally in all three assets M, N, and O?

nothing %

(Round to two decimal places.)

What is the expected return of investing in asset M alone?

nothing %

(Round to two decimal places.)

What is the standard deviation of the portfolio that invests equally in all three assets M, N, and O?

nothing %

(Round to two decimal places.)

What is the standard deviation of asset M?

nothing %

(Round to two decimal places.)By investing in the portfolio that invests equally in all three assets M, N, and O rather than asset M alone, Sally can benefit by increasing her return by

nothing %

and decreasing her risk by

nothing %.

(Round to two decimal places.)

States,Probability, Asset M Return, Asset N Return, Asset O Return Boom,33%,10%,21%,2% Normal,54%,8%,12%,8% Recession,13%,2%,1%,10%