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An investor wants to create a risk free portfolio with stocks S and Q . These two securities are perfectly negatively correlated. Following are the

An investor wants to create a risk free portfolio with stocks S and Q

.

These two securities are perfectly negatively correlated. Following are the details of stocks S and Q:

Expected Return

8 % 20 %

Standard deviation

6 % 17 %

What should be the percentage of the investment in stock S and what is the expected return of the portfolio?

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