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Suppose K1 and K2 have the following distribution:Scenario Probability return K1 return K2w(1) 0.3 -10% 10%w(2) 0.4 0% 20%w(3) 0.3 20% -10%(a) Find the risk of the portfolio with w1 = 30% and w2 =70%.(b) Find the risk of the portfolio with w1 = 50% and w2 =50%.(c) Which of the portfolios above (in part (a) and (b)), has higherexpected returns?
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