Business, 04.07.2020 20:01 luhzara1

Assume that an individual can either invest all of his resources in one of the two securities, A or B; or, alternatively, he can diversify his investment between the two. The distributions of the returns are as follows:Security A Security BReturn Probability Return Probability-10 1/2 -20 1/250 1/2 60 1/2Assume that the correlation between the returns from the two securities is zero, and answer the following questions:1) Calculate each security's expected return, variance and standard deviation.2) Calculate the probability distribution of the returns on a mixed portfolio comprised of equal proportions of securities A and B, i. e. calculate all possible returns on this portfolio and the probability of each one.3) Also calculate the portfolio's expected return, variance and standard deviation. 4) Calculate the expected return and the variance of a mixed portfolio comprised of 75% of security A and 25% of security B.

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