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A portfolio is comprised of equal weights of two stocks labeled Stock X and Stock Y. The covariance between Stock X and Stock Y is
A portfolio is comprised of equal weights of two stocks labeled Stock X and Stock Y. The covariance between Stock X and Stock Y is 0.10. The standard deviation of Stock X is 0.50, and the standard deviation of Stock Y is 0.50. Which of the following comes closest to the variance of the portfolio? Which of the following comes closest to the correlation coefficient between Stock X and Stock Y?
a. | 0.18 | |
b. | 0.60 | |
c. | 0.55 | |
d. | 1.00 | |
e. | 0.42 |
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