Question: please help find all): (Related to Checkpoint 8.2) (Computing the standard deviation for an individual investment) James Fromholtz is considering whether to invest in a



(Related to Checkpoint 8.2) (Computing the standard deviation for an individual investment) James Fromholtz is considering whether to invest in a newly formed investment fund. The fund's investment objective is to acquire home mortgage securities at what it hopes will be bargain prices. The fund sponsor has suggested to James that the fund's performance will hinge on how the national economy performs in the coming year. Specifically, he suggested the following possible outcomes: a. Based on these potential outcomes, what is your estimate of the expected rate of return from this investment opportunity? b. Calculate the standard deviation in the anticipated returns found in part a. c. Would you be interested in making such an investment? Note that you lose all your money in one year if the economy collapses into the worst state or you double your money if the economy enters into a rapid expansion. a. The expected rate of return from this investment opportunity is (Round to two decimal places) b. The investment's standard deviation is \%. (Round to two decimal places) StateofEconomyRapidexpansionandrecoveryModestgrowthContinuedrecessionFallsintodepression(Clickontheiconprinordertocopyitscontentsintoaspreadsheet.)Probability5%35%55%5%FundReturns100%40%10%100% (Portfolio expected rate of return) Barry Swifter is 60 years of age and considering retirement. Barry's retirement portfolio currently is valued at $750,000 and is allocated in Treasury bills, an S\&P 500 index fund, and an emerging market fund as follows: a. Based on the current portfolio composition and the expected rates of return given above, what is the expected rate of return for Barry's portfolio? b. Barry is considering a reallocation of his investments to include more Treasury bills and less exposure to emerging markets. If Barry moves all of his money from the emerging market fund and puts it in Treasury bills, what will be the expected rate of return on the resulting portfolio? a. Based on the current portfolio composition and the given expected rates of return, the expected rate of return for Barry's portfolio is 8.58%. (Round to two decimal places.) b. If Barry moves all his money out of emerging market funds and puts it in Treasury bills, the expected rate of return for his portfolio is \%. (Round to two decimal places.) Data table
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