Answer question g

INTEGRATIVE PROBLEM Assume you recently graduated with a major in finance, and you just landed a job in the trust department of a large regiona bank. Your first assignment is to invest $200,000 from an estate for which the bank is trustee. Because the estate is expected to be distributed to the heirs in approximately one year, you have been instructed to plan for a one-year holding period. Fur. thermore, your boss has restricted you to the following investment alternatives, shown with their probabilities and associated outcomes. (For now, disregard the items at the bottom of the table; you will fill in the blanks later.) (1) Should portfolio effects influence the way investors think about the riskiness of individual stocks? (2) If you chose to hold a one-stock portfolio and consequently were exposed to more risk than diversified investors, should you expect to be compensated for all your risk? That is, should you earn a risk premium on the part of your risk that you could have eliminated by diversifying