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(Computing the standard deviation for a portfolio of two risky investments) Mary Guilott recently graduated from Nichols State University and is anxious to begin investing

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(Computing the standard deviation for a portfolio of two risky investments) Mary Guilott recently graduated from Nichols State University and is anxious to begin investing her meager savings as a way of applying what she has leared in business school. Specifically, she is evaluating an investment in a portfolio comprised of two firms' common stock. She has collected the following information about the common stock of Firm A and Firm B: E. a. If Mary invests half her money in each of the two common stocks, what is the portfolio's expected rate of return and standard deviation in portfolio return? b. Answer part a where the correlation between the two common stock investments is equal to zero. c. Answer part a where the correlation between the two common stock investments is equal to +1. d. Answer part a where the correlation between the two common stock investments is equal to - 1. e. Using your responses to questions ad, describe the relationship between the correlation and the risk and return of the portfolio. a. If Mary decides to invest 50% of her money in Firm A's common stock and 50% in Firm B's common stock and the correlation between the two stocks is 0.50, then the expected rate of return in the portfolio is %. (Round to two decimal places.) Enter your answer in the answer box and then click Check Answer. ? 8 parts remaining Clear All Check Answer Firm A's common stock Firm B's common stock Correlation coefficient Expected Return 0.15 0.17 0.50 Standard Deviation 0.17 0.24

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