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You want to invest $15,000 in a portfolio that comprises three investments: Expected $ Value return Treasury bills 2.5% 3,000 Pepsi 5% 5,000 IBM 8%

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You want to invest $15,000 in a portfolio that comprises three investments: Expected $ Value return Treasury bills 2.5% 3,000 Pepsi 5% 5,000 IBM 8% 7,000 1. Compute the expected return on the portfolio. (1 point) 2. You are considering moving your money out of IBM. You will be reallocating your portfolio by splitting your money evenly between Pepsi and the treasury bills. Compute the new expected return on the portfolio after reallocation. (1 point) 3. If investing in T-bills causes a drop in the portfolio performance, why would anyone hold T-bills in their portfolio. (1 point)

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