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14. Shares in Hot Tea and Cold Ice are perfectly negatively correlated Share Expected Return (R) Standard deviation (s) Hot Tea 18 12 Cold Ice

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14. Shares in Hot Tea and Cold Ice are perfectly negatively correlated Share Expected Return (R) Standard deviation (s) Hot Tea 18 12 Cold Ice 12 6 a. Calculate the expected return from a portfolio consisting of 25 percent of Hot tea and 75 percent of Cold Ice. (1 mark) b. How would you allocate the fund to achieve a zero standard deviation (2 marks)

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