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(a) If two assets' returns are positively correlated, what is the covariance between the returns of these two assets? (7 marks) (b) What is the

(a) If two assets' returns are positively correlated, what is the covariance between the returns of these two assets? (7 marks)

(b) What is the relation between the correlation between and among assets and diversification? (10 marks)

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