Benefits of diversification . Sally Rogers has decided to invest her wealth equa
ID: 2827447 • Letter: B
Question
Benefits of
diversification.
Sally Rogers has decided to invest her wealth equally across the following three assets. What are her expected returns and the risk from her investment in the three? assets? How do they compare with investing in asset M? alone???
Hint?:
Find the standard deviations of asset M and of the portfolio equally invested in assets? M, N, and O.
??States
Probability
Asset M Return
Asset N Return
Asset O Return
??Boom
2525?%
1212?%
2222?%
44?%
??Normal
5151?%
1010?%
1414?%
1010?%
??Recession
2424?%
44?%
22?%
1212?%
What is the expected return of investing equally in all three assets? M, N, and? O?
___%
?(Round to two decimal? places.)
??States
Probability
Asset M Return
Asset N Return
Asset O Return
??Boom
2525?%
1212?%
2222?%
44?%
??Normal
5151?%
1010?%
1414?%
1010?%
??Recession
2424?%
44?%
22?%
1212?%
Explanation / Answer
Hi, your question is not attached properly please recheck your question as detail of stock o is missing and without that it can't be solved.
So I request you to please repost your question we will be happy to help you at chegg.
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