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Does portfolio of the two companies show lower standard deviation than individual stock company standard deviations? Calculate the expected return using CAPM for each company.

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  1. Does portfolio of the two companies show lower standard deviation than individual stock company standard deviations?
  2. Calculate the expected return using CAPM for each company.
  3. What is the beta of the portfolio and
  4. What is the expected return on the portfolio?

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