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Two investments have the following returns for the two events indicated:

event	Pobability	value of	investment
		D	F
e ₁	0.6	$600	-$100
e ₂	0.4	-$400	$500

a. Compute the expectation and variance of the return of each investment and their co-variance od the two investments.

b. Compute the correlation coefficient of the returns of the two investments.

c. What is the expected value and variance of the total return of the investment in both Dand F?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92748217

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