1. Suppose you are a fund manager, and you have to assets A and B to invest in. The state of the market is Bull or Bear with probability 50-50 split a) The return to 1 unit of asset A is given by G)The return to 1 unit of asset B is given by . suppose you buy 5 units of and 5 units of asset B, what will be your return vector? b) Suppose you are deciding what % of money to invest in each asset, let x be percentage of shares in asset A and (1-x) percentage in asset B, what will be your return vector? c) What is the expected account value given the probability of bull is .50? d) Write out the problem of maximization if you want to maximize the expected value. e) Which portfolio would maximize the total expected return? 2. Continued from Question 1.. (a) Suppose now your finance professor who knows the market is Bull or Bear in advance, and you can get that information in advance, how would you invest give your information is Bull or Bear? (b) What would be your expected return with this market information in advance? (c) How much does the information worth to you in advance? 1. Suppose you are a fund manager, and you have to assets A and B to invest in. The state of the market is Bull or Bear with probability 50-50 split a) The return to 1 unit of asset A is given by G)The return to 1 unit of asset B is given by . suppose you buy 5 units of and 5 units of asset B, what will be your return vector? b) Suppose you are deciding what % of money to invest in each asset, let x be percentage of shares in asset A and (1-x) percentage in asset B, what will be your return vector? c) What is the expected account value given the probability of bull is .50? d) Write out the problem of maximization if you want to maximize the expected value. e) Which portfolio would maximize the total expected return? 2. Continued from Question 1.. (a) Suppose now your finance professor who knows the market is Bull or Bear in advance, and you can get that information in advance, how would you invest give your information is Bull or Bear? (b) What would be your expected return with this market information in advance? (c) How much does the information worth to you in advance