Question: 7. A portfolio manager creates the following portfolio: Security Return Security Weight Expected Standard Deviation 1 15% 40% 30% 2 7% 60% 18% If the

7. A portfolio manager creates the following portfolio:

Security Return Security Weight Expected Standard Deviation

1 15% 40% 30%

2 7% 60% 18%

If the covariance of returns between the two securities is 0.05, calculate the portfolio expected return and expected standard deviation.

8. Discuss the concept of risk aversion and the different classification of investors based on risk appetite.

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