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2 You believe that there is a 40 percent chance that stock A will decline by 10 percent and a 60 percent chance that will

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2 You believe that there is a 40 percent chance that stock A will decline by 10 percent and a 60 percent chance that will increase by 20 percent. Correspondingly, there is a 30 percent chance that stock B will decline by 20 percent and a 70 percent chance that it will increase by 20 percent. The correlation coefficient between the two stocks is 0.7. Calculate the expected return, the variance, the standard deviation for each stock

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