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Bank A has an expected return of 7% with standard deviation of 30%. Bank B has expected return of 10% with standard deviation of 40%.

Bank A has an expected return of 7% with standard deviation of 30%. Bank B has expected return of 10% with standard deviation of 40%. If the return correlation is 0.5, the volatility of an equally weighted portfolio of both banks equals?

The answer is 0.304

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