ences Mailings Review View Help Share A 21 cod cDd AaBbc 1 Normal No Spac... Heading 1 Heading 2 Title Subtitle Subtle Em. Emphasis Find Replace Select Dictate Paragraph Editing Whine FIN 4416 - Problem Set #1 (Ch 12-13) - Spring 2019 3. You are considering adding one of the following three investments to your portfolio, which each have the following correlations to your existing investments. Which one would reduce your risk the most if you added it? Which one would reduce your risk the least? Investment Correlation Warren, Inc. 0.24 Sanders, Inc. 0.38 Inc. 0.75 4. a) Explain what does beta measure, b) A biotech company is an extremely risky investment, since the results of a single clinical trial can sometimes cause the company to be very valuable or essentially worthless. Given this information, under CAPM would you expect a biotech company to have a low beta ar a high beta? Explain. ACTS JOU LULUCULUTLY VUL - word Sierra Bames $5 I Mailings Review 5 to View Help 334 Sha AaBbCcDd AaBbCcDd AaBbc AaBbCel Aab AaBbCcDAoBbccd AaBbccd 1 Normal 1 No Spac... Heading 1 Heading 2 Title Subtitle Subtle Em... Emphasis o Find Sc Replace Select Paragraph Styles 5 Editing FIN 4416 - Problem Set #1 (Ch 12-13) - Spring 2019 3. You are considering adding one of the following three investments to your portfolio, which each have the following correlations to your existing investments. Which one would reduce your risk the most if you added it? Which one would reduce your risk the least? Investment Correlation Warren, Inc. 0.24 Sanders, Inc. -0.38 Biden, Inc. 0.75 4. a) Explain what does beta measure, b) A biotech company is an extremely risky investment, since the results of a single clinical trial can sometimes cause the company to be very valuable or essentially worthless. Given this information, under CAPM would you expect a biotech company to have a low beta or a high beta? Explain