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Assume that you hold two stocks, namely Stock A and Stock B. Assign an expected return and variance for each of these stocks separately, depending
Assume that you hold two stocks, namely Stock A and Stock B. Assign an expected return and variance for each of these stocks separately, depending on your choice. Also assign a correlation coefficient between the returns of these stocks. Then, calculate the expected return and standard deviation of a portfolio if 25% of portfolio is allocated to Stock A and the remainder in Stock B? (The use of same input data by different students will be treated as a cheat attempt and will be penalized severely).
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