Question: Please help answer both these questions 3. Assuming that the expected return on an average security is 13 per cent with a standard deviation of

Please help answer both these questions

3. Assuming that the expected return on an average security is 13 per cent with a standard deviation of 26 per cent, and the average covariance of returns between securities is + 100, determine the expected risk of a portfolio with 28 securities and a portfolio with 1,000 securities. Comment briefly on your results.

4. Now assume that the returns on securities are independent. Continuing to assume that the expected return on an average security is 13 per cent with a standard deviation of 26 per cent, determine the risk of a portfolio with 28 securities and 1,000 securities. Comment on your results.

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