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Stock A has a standard deviation of 7%. Stock B has a standard deviation of 12%. The correlation coefficient between the two stocks' returns is
Stock A has a standard deviation of 7%. Stock B has a standard deviation of 12%. The correlation coefficient between the two stocks' returns is 0.4071. What is the risk (standard deviation) for an equally weighted portfolio of stocks A and B?
a.
7.639%
b.
45.65%
c.
2.854%
d.
9.54%
e.
8.08%
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