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You plan to invest $ 1000 in a corporate bond fund. The following information about the annual return (per $ 1000) of each of these
You plan to invest $ 1000 in a corporate bond fund. The following information about the annual return (per $ 1000) of each of these investments under different economic conditions is available, along with the probability that each of these economic conditions will occur: (W = 0.5) Stock C Stock P Economic conditions Probability 75 - 35- Recession 0.15 60 - 65 stagnation 0.35 Moderate growth 240 130 High growth 0.1 160 90 0.4 Compute a- expected return for stock P and stock C b- Variance and standard deviation for stock P and stock C C- Covariance for stock P and stock C .C- Portfolio expected return and portfolio risk
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