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Below is the data for a portfolio consisting of two securities. Expected Rates of Return Standard Deviations r A = %30 A =%25 r B

Below is the data for a portfolio consisting of two securities.

Expected Rates of Return Standard Deviations
rA = %30 A =%25
rB = %15 B= %10

The correlation coefficient between these two securities is 45% and the total value of the portfolio formed by these securities is 10.000 TL. About TL 800 of this portfolio consists of securities A and the rest of securities B. Accordingly, their weights will be evaluated in the portfolio.

Answer the following, explaining the rationale for creating a portfolio and clearly demonstrating its formulations. a) Find the expected return of the portfolio consisting of these two securities. b) Find the risk of the portfolio consisting of these two securities.

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