Benefits of diversification Sally Rogers has decided to invest her wealth equally across the following...
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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 Malone? Hint: Find the standard deviations of asset M and of the portfolio equally invested in assets M, N, and O. What is the expected return of investing equally in all three assets M, N, and O? 12.73 % (Round to two decimal places.) What is the expected return of investing in asset M alone? 11.48 % (Round to two decimal places.) What is the standard deviation of the portfolio that invests equally in all three assets M, N, and O? % (Round to two decimal places.) i Data Table (Click on the following icon in order to copy its contents into a spreadsheet.) Asset N Return 24% States Boom Normal Recession Probability 31% 50% 19% Asset M Return 14% 12% 6% Asset O Return 6% 12% 14% 16% 4% Print Done
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