shortyyashaun
shortyyashaun
21.04.2020 • 
Business

Consider an economy with two types of firms, S and I. S firms all move together. I firms move independently. For both types of firms there is a 60 % probability that the firm will have a 15 % return and a 40 % probability that the firm will have a negative 10 % return. What is the volatility (standard deviation) of a portfolio that consists of an equal investment in:

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