Expected return standard deviation

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Reference no: EM13953585

Please consider the following two assets:

Expected Return Standard Deviation

Asset 1: 12% 8%

Asset 2: 6% 15%

1) If you have capital to invest into only 1 asset, which one would you select? Why?

2) Now that you have the resource to invest into both assets, will your decision change? Why? Specifically, please state that, based on your answer to question 1), will the asset you abandon in 1) become useful this time? (e.g. if you decide to choose asset 2, so that you decide to abandon asset 1, then do you also want to abandon asset 1 when you have the resource to invest into both assets?

Reference no: EM13953585

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