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Assume that you decide to form an equal - weighted portfolio including only those two stocks. Stock A Expected annual rate of return 8 %

Assume that you decide to form an equal-weighted portfolio including only those two stocks.
Stock A
Expected annual rate of return 8%
Expected annual standard deviation 24%
Stock B
expected annual rate of return 12% expected annual standard deviation 30%
Calculate the expected standard deviation of your portfolio, corresponding to each scenario with regard to the correlation coefficient between stock A and stock B, i.e. when rho_12=-1,-0.5,0,0.5, or 1.
If rho _12=0.5, what is the standard deviation of the portfolio which invests 1/3 in stock A,1/3 in stock B, and 1/3 in a risk-free asset?
If rho _12=0.5, given that 50% of the total investment is financed by borrowing at the risk-free rate, what is the standard deviation of the portfolio which invests equally in stock A and B?
If rho _12=0.5, what combination of stock A and stock B offers the minimum risk?

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