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Management Studies

Q. a. Compute the expected portfolio return, rp, for each of the 6 years.

b. Compute the average expected portfolio return, rp, over the 6-year period.

c. Compute the standard deviation of expected portfolio returns, sp over the 6-year period.

d. Explain how would you characterize the correlation of returns of the two assets L and M?

e. Discuss any benefits of diversification achieved through creation of the portfolio.

f. Assume that asset L represent 60% of the portfolio and asset M 40%. Compute the average expected return and standard deviation of expected portfolio returns over the 6-year period. Compare your answers to the answers from part b. and c.

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Business Management, Management Studies

Category:- Business Management
Reference No.:- M9375834

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