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Benefits ofdiversification.Sally Rogers has decided to invest her wealth equally across thefollowing three assets.??a.??What are her expected returns and the risk from herinvestment in the three? assets? How do they compare with investingin asset M? alone???Hint?:Find the standard deviations of asset M and of the portfolioequally invested in assets? M, N, and O.b.??Could Sally reduce her total risk even more by using assetsM and N? only, assets M and O? only, or assets N and O? only? Usea? 50/50 split between the asset?pairs, and find the standarddeviation of each asset pair.??StatesProbabilityAsset M ReturnAsset N ReturnAsset O Return??Boom29?%13?%22?%5%??Normal53?%11?%15?%11?%??Recession18%5?%2?%13?%
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