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The expected return and standard deviation of return for security A is 10% and 12% and for security B is 15% and 10%, respectively. What
The expected return and standard deviation of return for security A is 10% and 12% and for security B is 15% and 10%, respectively. What is the overall effect of decreasing the amount of funds invested in security A while not altering the total funds invested in a portfolio of securities A and B on the portfolios expected return? What additional factor(s) would influence the overall risk of the portfolio and why?
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