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Suppose Tex stock has a volatility of 40%, and Mex stock has a volatility of 22%. If Tex and Mex are uncorrelated, a. Construct a

Suppose Tex stock has a volatility of 40%, and Mex stock has a volatility of 22%.

If Tex and Mex are uncorrelated,

a. Construct a portfolio with positive weights in both stocks and that has the same volatility as MEX alone.

b. What portfolio of the two stocks has the smallest possible volatility?

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