5.2.11 Question Help Suppose that you are deciding between two different investm

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5.2.11 Question Help Suppose that you are deciding between two different investments for the coming year. The first investment is a mutual fund that consists of the stocks that comprise the Dow Jones Industrial Average. The second investment is a mutual fund that is expected to perform best when the economy is weak. Let X be the variable that corresponds to the Dow Jones fund and Y be the variable that corresponds to the weak-economy fund. The expected values and the variances for each variable and the covariance are calculated and the results are shown belovw E(X)-$145, E(Y)-$45,: 52,725, = 54,225, OxY-_ 51,525 When half of the portfolio assets are invested in the Dow Jones fund and half in a weak-economy fund, the portfolio expected return is found to be $95 and the portfolio risk is found to be $31.22. Complete parts (a) through (c) below Click the icon to view the table that summarizes the estimate of returns. a. Recalculate the portfolio expected return and the portfolio nsk if 30% of the portfolio assets are invested in the Dow Jones fund and 70% in a weak-economy fund. The portfolio expected return is E(P) (Type an integer or a decimal.) Summary of Investment Returns The table summarizes the estimate of the returns per $1,000 investment under three economic conditions Investment P(XYi Economic Condition Dow Jones Fund Weak-Economy 0.2 0.5 0.3 Recession Stable economy Expanding economy $200 +100 +450 Fund +$300 +150 -300 PrintDone Enter your answer in the answer box and then click Check Answer

Explanation / Answer

a) here expectd return =0.3X+0.7Y =0.3*145+0.7*45 = 75  

please revert for other parts.

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