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Please give me specific steps, thanks! 9. (10%) Suppose stock A has an expected return of 10% and a volatility of 50% while stock B
Please give me specific steps, thanks!
9. (10\%) Suppose stock A has an expected return of 10% and a volatility of 50% while stock B has an expected return of 5% and volatility of 20%. These two stocks were perfectly negatively correlated (i.e., their correlation is -1) a) (5%) How to mix these two assets to create a portfolio with zero standard deviation? b) (5%) if there are no arbitrage opportunities, what is the risk-free rate of interest in this economy Step by Step Solution
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