a. Find the expected return for each project.b. Find the proportion of funds in each project to achieve an expected portfolio return of 20%.(c) Calculate the correlation coefficient between projects A and B.d) Find the portfolio risk. State and Prob. Project A'sreturnGood. 30%Average 40%Poor 30%27185Project B'sreturn351520

Answered: State and Prob. Project A's return…

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State and Prob. Project A's return Good. 30% Average 40% Poor 30% 27 18 5 Project B's return 35 15 20

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

a. Find the expected return for each project.

b. Find the proportion of funds in each project to achieve an expected portfolio return of 20%.

d) Find the portfolio risk.

State and Prob. Project A's
return
Good. 30%
Average 40%
Poor 30%
27
18
5
Project B's
return
35
15
20

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