Question

Given the following probability distributions, what are the expected returns for the Market and for Security J?

StateiPr i rMrJ

1 0.3 u221210% 40%

2 0.4 10 u221220

3 0.3 30 30

a. 10.0%; 11.3%

b. 9.5%; 13.0%

c. 10.0%; 9.5%

d. 10.0%; 13.0%

e. 13.0%; 10.0%

Answer

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