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-2. (Computing the standard deviation for an individual investment) (Related to Checkpoint 8.2 on page 231) Calculate the standard deviation in the anticipated returns found
-2. (Computing the standard deviation for an individual investment) (Related to Checkpoint 8.2 on page 231) Calculate the standard deviation in the anticipated returns found in Problem 8-1. Pearson Copyright O 2018 Pearson Education, Lid. Alt Rights Reserved 3. (Computing the standard deviation for a portfolio of two risky investments) Mary Guilott recently graduated from Nichols State University and is anxious to begin investing her meager savings as a way of applying what she has learned in business school. Specifically, she is evaluating an investment in a portfolio comprised of two firms' common stock. She has collected the following information about the common stock of Firm A and Firm B: a. If Mary invests half her money in each of the two common stocks, what is the portfolio's expected rate of return and standard deviation in portfolio return? b. Answer part a where the correlation between the two common stock investments is equal to zero. c. Answer part a where the correlation between the two common stock investments is equal to +1. d. Answer part a where the correlation between the two common stock investments is equal to 1. e. Using your responses to parts a-d. describe the relationship between correlation and the risk and return of the portfolio
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