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Question 16 (1 point) Richard has two investment opportunities. He can invest in The Sunglasses Company or The Umbrella Compa
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Answer #1

Return if State of economy is 'Sunny' = 0.5*25%+0.5*0 = 12.5%

Return if State of economy is 'Rainy' = 0.5*0+0.5*25% = 12.5%

Hence, expected return = 12.5%
and, standard deviation = 0%

The expected return for the portfolio is 12.50% and the standard deviation is 0.00%.

Please do rate me and mention doubts, if any, in the comments section.

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