Assuming the following data for three stocks: Probability Stock A 10% 5% -10% 6% 0.25 0.4...

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Assuming the following data for three stocks: Probability Stock A 10% 5% -10% 6% 0.25 0.4 0.15 0.2 Stock B 8% 12% -5% 5% Stock C 12% 10% -8% 0% a. Assuming you can only invest in one of them (A or B or C) which one should you invest in? Why? b. What is the expected return and standard deviation of a portfolio investing 50% in A, 25% in B and 25% in C? c. Find an investment that will dominate this portfolio. Assuming the following data for three stocks: Probability Stock A 10% 5% -10% 6% 0.25 0.4 0.15 0.2 Stock B 8% 12% -5% 5% Stock C 12% 10% -8% 0% a. Assuming you can only invest in one of them (A or B or C) which one should you invest in? Why? b. What is the expected return and standard deviation of a portfolio investing 50% in A, 25% in B and 25% in C? c. Find an investment that will dominate this portfolio.

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Answer To determine which stock to invest in we can compare their expected returns and standard devi... View the full answer