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2. Consider the following information on the expected returns, variances and covariance for the stocks of Clearfield and Apple: Stock Clearfield Apple Expected 0.325 0362

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2. Consider the following information on the expected returns, variances and covariance for the stocks of Clearfield and Apple: Stock Clearfield Apple Expected 0.325 0362 return Variance 0.709 0.256 Covariance -0.029 You invest $2500 in Clearfield and $1500 in Apple. a. What is the expected return on your portfolio? (2 points) b. What is the volatility of the portfolio? (2 points) c. What is the correlation coefficient between the two stocks and what does it imply in terms of potential diversification benefits

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