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Question 3 a. Suppose we form a portfolio invested in Mercedes and BMW stocks. The two stocks are equally weighted in the portfolio. The table

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Question 3 a. Suppose we form a portfolio invested in Mercedes and BMW stocks. The two stocks are equally weighted in the portfolio. The table below displays each stock's mean return, variance, and standard deviation, as well as their covariance. Estimate the mean and variance of this portfolio, as well as its standard deviation. Show in detail your calculations. Asset returns Mean return Variance Standard deviation Covariance Mercedes BMW 1.78% -0.48% 0.0456 0.0276 21.35% 16.61% 0.0020 [5 marks]

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