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Consider the following returns of Stock I and Stock 2: Stock 1 Stock 2 Realized Realized Year End Return Return 2004 20.1% -14.6% 2005 72.7%

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Consider the following returns of Stock I and Stock 2: Stock 1 Stock 2 Realized Realized Year End Return Return 2004 20.1% -14.6% 2005 72.7% 4.3% 2006 -25.7% -58.1% 2007 56.9% 71.1% 2008 6.7% 17.3% 2009 17.9% 0.9% Suppose you have a portfolio that is made up of 70% investments in Stock 1 and 30% investments in Stock 2. Compute: 1) Average annual return of the portfolio from 2004 to 2009; Variance of the portfolio; 3) Standard deviation of the portfolio

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