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3. You are constructing a portfolio with the following assets: Expected return (u) Standard deviation (0) Correlation coefficient (P) Stocks 11.2% 19.2% Bonds 5.6% 8.1%

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3. You are constructing a portfolio with the following assets: Expected return (u) Standard deviation (0) Correlation coefficient (P) Stocks 11.2% 19.2% Bonds 5.6% 8.1% 0.13 1) You invest 77% of your wealth in stocks and 23% in bonds. Calculate the expected return and standard deviation of your portfolio. 2) Calculate standard deviations when the correlation coefficients are two extreme values, -1 and +1. Which case would you prefer

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