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1. Consider the following information for two stocks, X and Y. The stocks'returns are negatively correlated with one another, ie , the AB=-03. Expected Standard

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1. Consider the following information for two stocks, X and Y. The stocks'returns are negatively correlated with one another, ie , the AB=-03. Expected Standard Stock ReturnDeviation Beta 5% 4% 15% 10% 1.4 -0.8 Portfolio XY has one fifth of its funds invested in Stock X and the rest in Stock Y a. Find portfolio XY's expected return. b. Find portfolio XY's beta. c. Which stock would you hold by d. Which stock is the best as a part of a well-diversified portfolio? Why? 2. What is the major difference between CAPM and Fama-French model? How are the two models similar

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