3) An investor has the choice of the following assets that earn rates of return as...

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3) An investor has the choice of the following assets that earn rates of return as follows in each of the four possible states of the world: State Probability Asset1 Asset2 Asset3 1 0.2 5% 5% 6% 2 0.3 5% 12% 5% 3 0.1 5% 3% 4% 4 0.4 5% 1% 7% 10,000 17,546 82,456 Market Capitalisation Determine the market price of risk assuming CAPM holds. Define all terms used. 3) An investor has the choice of the following assets that earn rates of return as follows in each of the four possible states of the world: State Probability Asset1 Asset2 Asset3 1 0.2 5% 5% 6% 2 0.3 5% 12% 5% 3 0.1 5% 3% 4% 4 0.4 5% 1% 7% 10,000 17,546 82,456 Market Capitalisation Determine the market price of risk assuming CAPM holds. Define all terms used.