You want to invest $ 10,000 in the stock market. You are particularly interested in the stock of two companies, A and B. You have three options: Invest the $10,000 in stock A only. Invest the $10,000 in stock B only. Invest $5,000 in stock A and $5,000 in stock B.Here are the details for each of the three options: Option 1: RA=10%, var(RA)=1.6%, Beta A = 1.5 Option 2: RB=14%, var(RB)=2.5%, Beta A = 1.2 Option 3: Rp?, Var(RP)=?, beta B?, the correlation coefficient between the two stocks pAB = -0.05 Calculate the missing values for Option 3. Which option is the most interesting in terms of return? If you want to minimize your total risk (measured by the variance/standard deviation),which of the three options is the most interesting? If you wish to minimize your market risk (measured by beta),what is the three options is the most interesting?

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Missing Values and Analysis for Option 3 Option 3 Invest 5000 in A and 5000 in B Missing Values Rp Expected Return of Portfolio We can calculate the e... View the full answer