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Assume you are considering a portfolio containing two assets, L and M. Asset L will represent 40% of the dollar value of the portfolio, and

Assume you are considering a portfolio containing two assets, L and M. Asset L will represent 40% of the dollar value of the portfolio, and asset M will account for the other 60%. The projected returns over the next six years, 20182023, for each of these assets are summarized in the following table.

Year

Asset L

Asset M

2018

14%

20%

2019

14%

18%

2020

16%

16%

2021

17%

14%

2022

17%

12%

2023

19%

10%

I've done the math already, So the expected portfolio return for each year is as follows: 2018 - 17.6%, 2019 - 16.4%, 2020 - 16.0%, 2012 - 15.2%, 2022 - 14.0%%, 2023 - 13.6%. The Average Portfolio Return = 15.5% and the Standard deviation = 1.51%. The question is: How would you characterize the correlation of return of the assets L and M?

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