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A&B company has expected returns of 7% with a standard deviation of 10%. The Z company has expected returns of 16% with a standard deviation
A&B company has expected returns of 7% with a standard deviation of 10%. The Z company has expected returns of 16% with a standard deviation of 20%. The correlation of returns between these companies is 22%. Calculate the expected return and standard deviation of a portfolio that consists of a long position of $10,000 in A&B, and a short position of $2,000 in company Z.
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