Problem 1. Computing expected returns on a equal-weighted portfolio An investor can invest in three risky assets. Asset 1 has an expected return of 7%, asset 2 of 8%, and asset 3 of 6%. Risks (SD) for the assets are 10% for Asset 1, 12% for Asser 2, and 15% for Asset 3. Assume that the assets are uncorrelated (have zero correlation with each other). An equal-weighted portfolio is formed with the three assets. Part A. What is the expected return of the equal-weighted portfolio? [2 Points] Part B. What is the risk (SD) of the equal-weighted portfolio? [2 Points] Problem 2: Risk in N-asset equal-weighted portfolio An investor invests in an equal-weighted portfolio of N assets, all of them have the same variance. The assets are assumed to be uncorrelated. Part A. What is the (risk) variance of that portfolio? [2 points] Part B. What happens to the risk of that portfolio when N is sufficiently large? [2 points]