Question: please answer and show work please The following statistics and estimates were compiled by Big Moon Bank regarding a proposed new branch office and the
The following statistics and estimates were compiled by Big Moon Bank regarding a proposed new branch office and the bank itself: Branch office expected return Standard deviation of branch return =15% Existing bank's expected return =8% Standard deviation of existing bank's retum =10% Branch assot value as a percontage of total bank assets =5% Correlation of net cash flows for branch and bank as a whole =16% +0.48 What will happen to Big Moon's total expected retum and overall risk if the proposed new branch project is adopted
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