Question: PLEASE ANSWER ALL !! GIVE EXPLANATIONS FOR EACH!!! I WILL GIVE THUMBS UP! Part II: Computation Questions Consider Table below for Question 1 1. Suppose

PLEASE ANSWER ALL !!

GIVE EXPLANATIONS FOR EACH!!!

I WILL GIVE THUMBS UP!

Part II: Computation Questions Consider Table below for Question 1 1. Suppose that you have $100,000 for investments. Diversification is important in investing. Therefore, you divide equally the investment money into two stocks: Stock A and Stock B. Based on this setup, compute the expected returns on the portfolio of Stock A and Stock B (15 points). Compute your portfolio risk (15 points). Use the following formulae. rA(expectedvalueofstockA)=(rABad)PBad+(rAGood)PGoodPf2=WA2A2+WB2B2+2WAWBCov(A,B)Cov(A,B)=(rABadrA)(rBBadrB)PBAA+(rAGoodrA)(rBGoodrB)PCoodd Where WA= the weight of your investment in Stock A; rA= the expected return on Stock A;pf2 is the variance of the portfolio of Stock A and Stock B; A is the standard deviation of returns on Stock A.A2 is the variance of returns on Stock A; PBad is the probability of "bad" economic condition in the future. rA60od is the expected retum on Stock A if the economic condition is good in the future. Similar letter notations were applied to Stock B

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