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sunkiss22 sunkiss22
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A month ago
Suppose you have $20,000 to invest in two securities: Spot and Dot. After you have done an extensive analysis of the economy and the two securities, you have the following forecasts:

State of the
Economy
Probability of
Occurrence
Spot
Expected Return
Dot
Expected Return
Boom15%-6%35%
Normal60%12%20%
Bust25%18%-10%
a) What are the expected returns on Spot and Dot?
b) What are the standard deviations of the returns on Spot and Dot?
c) What is the covariance of the returns on Spot and Dot?
d) What is the correlation between Spot and Dot?
e) What is the composition of the portfolio if you wish to have an expected return of 12 percent on the portfolio?
f) What is the standard deviation of the portfolio?
Textbook 
Corporate Finance

Corporate Finance


Edition: 5th
Author:
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KFordKFord
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A month ago
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sunkiss22 Author
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A month ago
Smart ... Thanks!
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Yesterday
Thank you, thank you, thank you!
wrote...

2 hours ago
this is exactly what I needed
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