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STEP 2 of 4 George is an investor who believes that past variability of stocks is a reasonably good estimate of future risk associated with

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STEP 2 of 4 George is an investor who believes that past variability of stocks is a reasonably good estimate of future risk associated with the stocks. George works on creating a new portfolio and has already purchased stock A. Now he considers two other stocks, B and C. George collected data on the historic rates of return for all three stocks, which are presented in the following table. Year 2015 2016 Stock A 30% 25% -5% 2017 Stock B Stock C 25% -10% 30% -5% -10% 25% 10 10 20.41 20.41 304 -10% -59 2018 Average return Estimated standard deviation 10 20.41 suppose cerve can only afford to complement stock A by adding just one of the two other stocks, the stock or stock C. Complete the following table by computing correlation coefficients between stocks A and B and between stods A and Cand cakevate average retume and standard deviation for the two potential portfolios, Anand ACI Stocks A and Stocks A and C Correlation coefficient Average return Standard deviation le

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