Suppose K1 and K2 have the following distribution: Scenario Probability return K1 return K2 w(1) 0.3...

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Finance

Suppose K1 and K2 have the following distribution:
Scenario Probability return K1 return K2
w(1)    0.3 -10% 10%
w(2)    0.4 0% 20%
w(3)    0.3 20% -10%

(a) Find the risk of the portfolio with w1 = 30% and w2 =70%.
(b) Find the risk of the portfolio with w1 = 50% and w2 =50%.
(c) Which of the portfolios above (in part (a) and (b)), has higherexpected returns?

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ProbabilityPReturnPReturnDeviation form expected return D1PD2031031350700400336003206178670Expected Return PReturn 306 3Variance PD2 50736867 141Standard Deviation Variance 141 1187ProbabilityPReturnPReturnDeviation form See Answer

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Suppose K1 and K2 have the following distribution:Scenario Probability return K1 return K2w(1) 0.3 -10% 10%w(2) 0.4 0% 20%w(3) 0.3 20% -10%(a) Find the risk of the portfolio with w1 = 30% and w2 =70%.(b) Find the risk of the portfolio with w1 = 50% and w2 =50%.(c) Which of the portfolios above (in part (a) and (b)), has higherexpected returns?