QUESTION

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1. (10 points) Given the return matrix \[ R=\left(\begin{array}{cc} 2 & 0 \\ -1 & 0.1 \end{array}\right) \] and the probabilities $p_{1}=0.8, p_{2}=0.2$, compute without using any software the maximum expected return that we can get while the ADR is zero.

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PAGYMV The First Answerer