Question: Professor 9 - Thi... 12:53 Kyle Den Problem 2. (15 points) Consider two risky securities. By Ki denote the return on the i-th security, i

Professor 9 - Thi... 12:53 Kyle Den Problem 2. (15 points)

Professor 9 - Thi... 12:53 Kyle Den Problem 2. (15 points) Consider two risky securities. By Ki denote the return on the i-th security, i = 1,2. Suppose you are given the following scenarios: Scenario Probability K1 K2 W1 0.6 -11% -3% 0.4 20% 12% (a) Calculate the expected returns M1, M2 and the variances o, oz. (b) Determine the feasible portfolio V constructed from both securities such that the risk ov is minimized. NY m... 12:27 W2 Dr. Mauro ssign... 12:16

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