Question: solve this problem Explain your answer with the help of characteristic mine. 3. suppose you are working in a mutual fund and have been assigned
solve this problem
Explain your answer with the help of characteristic mine. 3. suppose you are working in a mutual fund and have been assigned a task to evaluate the stocks of two companies A and B the possible returns and probabilities are listed below, you need to decide if it's a good decision to invest in one company or a portfolio (5 marks) Returns Returns Probability (p) Stock A(%) Stock B (%) 0.2 -5 10 0.6 20 15 0.2 40 20 Required: a. Compute the expected return and standard deviation and for each stock along with a two stock portfolio with 50% investment in each. If you are risk averse then which stock you would prefer to buy and why
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