Suppose you have an investment a whose return is normally

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Question: Suppose you have an investment A whose return is normally distributed with mean 8% and standard deviation of 5 %. An alternative investment B gives an the same return with a standard deviation of 8%.

(a) What is the probability of losing money in investments A and B?

(b) Would you rather construct a portfolio that uses A and B (e.g., C = 10A + 10B)? Why?

Reference no: EM13577013

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