# Question: Using the data in Problem 5 and assuming an equally

Using the data in Problem 5 and assuming an equally weighted portfolio, calculate the following:

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Using Blume’s technique, where βi2 = 0.343 + 0.677βi1, calculate βi2 for the securities in Problem 5. In Problem 5 Given a three-index model such that all indexes are orthogonal, derive the formulas for the expected return, variance, and covariance of any stock. Using the data from Problem 1, what is the optimum portfolio assuming short sales are allowed but riskless lending and borrowing are forbidden? In Problem 1 Consider the following investments. Which is preferred if U(W) = W - 0.05W2? Consider the following returns: What is the average return in each market from the point of view of a U.S. investor and of a U.K. investor?Post your question