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Test #3 Question 1: There are three stocks you plan to invest in. Year Stock A Stock B Stock C 2022 25% -5% -10% 2023
Test #3 Question 1: There are three stocks you plan to invest in. Year Stock A Stock B Stock C 2022 25% -5% -10% 2023 -5% 15% 40% 2024 35% 25% 50% Avg Return Std Deviation Correlation Coeff AB 0.05 Correlation Coeff AC -0.12 Correlation Coeff BC 0.98 Required 1. Calculate expected return for each stock 2. Calculate standard deviation for each stock 3. Which combination of TWO stocks would have maximized portfolio returns? 4. Which combination of TWO stocks would have minimized portfolio risks
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