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Portfolio return and standard deviation Personal Finance Problem Jamie Wong is thinking of building an investment portfolio containing two stocks, L and M. Stock L

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Portfolio return and standard deviation Personal Finance Problem Jamie Wong is thinking of building an investment portfolio containing two stocks, L and M. Stock L will represent 50% of the dollar value of the portfolio, and stock M will account for the other 50%. The historical returns over the next 6 years, 2013-2018, for each of these slocks are shown in the following table: a. Calculate the actual portfolio return, rp for each of the 6 years. b. Calculate the expected value of portfolio returns, rp over the 6 -year period. c. Calculate the standard deviation of expected portfolio returns, fp,p2 or the 6 -yoar period. d. How would you characterize the correlation of returns of the two stocks L and M ? e. Discuss any benefits of diversification achieved by Jamie through creation of the portfolio. Data table (Click on the icon here 5 in order to copy the contents of the data table below into a spreadsheet.) Portfolio return and standard deviation Personal Finance Problem Jamie Wong is thinking of building an investment portfolio containing two stocks, L and M. Stock L will represent 50% of the dollar value of the portfolio, and stock M will account for the other 50%. The historical returns over the next 6 years, 2013-2018, for each of these slocks are shown in the following table: a. Calculate the actual portfolio return, rp for each of the 6 years. b. Calculate the expected value of portfolio returns, rp over the 6 -year period. c. Calculate the standard deviation of expected portfolio returns, fp,p2 or the 6 -yoar period. d. How would you characterize the correlation of returns of the two stocks L and M ? e. Discuss any benefits of diversification achieved by Jamie through creation of the portfolio. Data table (Click on the icon here 5 in order to copy the contents of the data table below into a spreadsheet.)

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