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In: Finance

ECONOMY:                             POSSIBLE RETURNS EGA        &nbs

ECONOMY:                             POSSIBLE RETURNS

EGA                       HAILA

BUST     25% chance        -20%                      25%

BOOM 75% chance 40%                       5%

Compute for the following:

  1. Expected return of EGA
  2. Expected return of HAILA
  3. Variance of EGA
  4. Standard deviation of EGA
  5. Variance of HAILA
  6. Standard deviation of HAILA

Compute for the following if the you invest 45% of your asset to EGA and 55% to HAILA

  1. Expected portfolio return
  2. Variance of the portfolio
  3. Standard deviation of the portfolio

Solutions

Expert Solution

jeff jeffy answered 1 year ago
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