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but this is an investment subject (a) As an analyst in Bullish Investment Company, you have derived the following information about 2 securities from past
but this is an investment subject
(a) As an analyst in Bullish Investment Company, you have derived the following information about 2 securities from past data: Securities Expected returns (%) 15 5 Standard deviation (%) 15 10 Y Correlation XY -0.7 Based on the above information, i) Calculate the portfolio expected returns and standard deviation if the investor invests 75% in Stock X and 25% in Stock Y. (5 marks) ii) Calculate the standard deviation for this portfolio, assuming the investor invests 75% in Stock X and 25% in Stock Y. (13 marks) What can you conclude about your results from the perspective of portfolio risk? (2 marks)Step by Step Solution
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