Question
1. You are recently decided to invest $5,000 in the stock market. With such a small amount of money, you decide to invest in
1. You are recently decided to invest $5,000 in the stock market. With such a small amount of money, you decide to invest in two stocks, allowing you easy access to a diversified portfolio. Relevant information is as follows: Stock ACB KDC Amount invested $2,000 $3,000 Expected return 12% p.a. 14%p.a. Standard deviation 30% 40% If the correlation between the returns of the two stocks is 0.1, what is the expected return and standard deviation of your portfolio?
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