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Julie is an investor who believes that past variability of stocks is a reasonably good estimate of future risk mediated with the stocks e works

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Julie is an investor who believes that past variability of stocks is a reasonably good estimate of future risk mediated with the stocks e works Creating a new portfolio and has already purchased stock A. Now she considers two other stocks, and colle collected data on the storiches of return for all three stocks, which are presented in the following table. Year 2013 2014 2015 Stock Stock 40% -5% -10% 40% 35% -10% -5% 35% Stock 35% -5% -10% 40% 2016 Average return Estimated standard deviation 15 15 15 26.14 26.14 26.14 Suppose Julle can only afford to complement stock A by adding just one of the two other stocks, either stock 8 or stock C-complete the following table by computing correlation coefficients between stocks A and B and between stocks A and C, and calculate average returns and standard deviation for the two potential portfolios, AB and AC: Stocks A and B Stocks A and c Correlation coefficient Average return Standard deviation

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