Question: please answer both questions and round as it askes please Benefits of diversification. Sally Rogers has decided to invest her wealth equally across the following
please answer both questions and round as it askes please
Benefits of diversification. Sally Rogers has decided to invest her wealth equally across the following three assets: B a. What are her expected returns and the risk from her investment in the three assets? How do they compare with investing in asset Malone? Hint Find the standard deviations of asset M and of the portfolio equally invested and O. b. Could Sally reduce her total risk even more by using assets M and N only, assets M and O only, or assets N and only? Use a 50/50 split between the asset pairs, and find the standard deviation of each asset pair. a. What is the expected return of investing equally in all three assets M, N, and O? % (Round to two decimal places.) Data Table (Click on the following icon in order to copy its contents into a spreadsheet.) States Boom Normal Recession Probability 31% 45% 24% Asset M Return 13% 10% 1% Asset N Return 22% 15% 2% Asset O Return 1% 10% 13% Print Done
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