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Case #2: Estimating Expected Return and Volatility of a Portfolio (7 marks) Suppose Johnson & Johnson and the Walgreen Company have expected returns and volatilities

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Case #2: Estimating Expected Return and Volatility of a Portfolio (7 marks) Suppose Johnson & Johnson and the Walgreen Company have expected returns and volatilities shown below, with a correlation of 22%. ETRI SDIRI Johnson & Johnson 7% 16% Walgreen Company 10% 20% a) Calculate the expected return of a portfolio that is equally invested in J&J and Walgreen's stock b) Calculate the volatility (standard deviation) of a portfolio that is equally invested in Johnson & Johnson's and Walgreen's stock

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