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A portfolio is composed of two stocks, A and B. Each stock has an expected return of 15%. For Stock A, the standard deviation of

A portfolio is composed of two stocks, A and B. Each stock has an expected return of 15%. For Stock A, the standard deviation of the rate of return is 20%. For Stock B, the standard deviation of the rate of return is 30%. Stock A comprises 40% of the portfolio while Stock B comprises 60% of the portfolio. What is the standard deviation of return for the portfolio if the correlation coefficient between the returns for A and B is 0.5?

5.3%

23.1%

27.4%

45.4%

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