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Suppose that you have identified two stocks with risk and return properties as described in the table below: Expected Return E(R i ) Variance i
Suppose that you have identified two stocks with risk and return properties as described in the table below:
| Expected Return E(Ri) | Variance i 2 | Standard Deviation i | Correlation 1,2 |
Stock 1 | 10% | 0.01 | 10% | -1 |
Stock 2 | 20% | 0.09 | 30% |
If you invest a half of your money in Stock 1 and the other half in Stock 2, what will be the mean return of this two-stock portfolio of yours?
Round your answer to the nearest 0.1% and enter your answer as a percentage. For example, if your answer is "12.3%", enter "12.3".
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