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Sarah has decided to construct an investment portfolio consisting of two stocks: IBM and GE. She decides to allocate 60 percent of her portfolio to
Sarah has decided to construct an investment portfolio consisting of two stocks: IBM and GE. She decides to allocate 60 percent of her portfolio to IBM and 40% of her portfolio to GE. She expects the returns in each state of the world to be as follows:
If the expected return on the portfolio is 6.30%, determine the standard deviation of the portfolios returns.
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