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3. You can form a portfolio of two assets, A and B, whose returns have the following charac- teristics: Stock Expected Return Standard Deviation Correlation

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3. You can form a portfolio of two assets, A and B, whose returns have the following charac- teristics: Stock Expected Return Standard Deviation Correlation Between A and B 0.5 A B 10% 15% 20% 40% If you demand an expected return of 12%, what are the portfolio weights? What is the portfolio's standard deviation

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