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# portfolio distribution

1:24 7
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MTH 237 A2
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MTH 237: Class Exercise 2
Probability Distribution
Two portfolios, A &amp; B, are currently being considered by a financial
planner. The probability distributions of expected return for these
assets are shown in the following table:
Asset A
Asset B
Assets Return % Pr Return % Pr
24
\$2500 8
10.40
\$3500 10
0.15
\$1500 -2
0.15
\$2700
\$34009
0.20
Required
1. Calculate the expected return of asset A &amp; B. Which asset has
the highest return?
2. Calculate the variance and standard deviation for each of the
asset's return. Which one appears to have highest risk?
3. Calculate the coefficient of variation and Sharpe ratio for each
asset.
4. Put all the results calculated above on a table . Which one will
you choose and why?
[45marks]

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