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You are analysing Jockie Industries. It has a beta of 1.2. The expected return on a market portfolio is 10%, and risk free rate is

You are analysing Jockie Industries. It has a beta of 1.2.

The expected return on a market portfolio is 10%, and risk free rate is 4%.

a. What is the expected return of Jockie?

b. If you want to diversify your investment risk, so you decide to invest 60% of your money in Jockie, and rest of your money in a risk-free government bond. If you know the standard deviation of Jockie is 10%, what is your portfolio risk measured by standard deviation?

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