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The question is based on the case of Mrs Smart. (a) Your client, Mrs Smart, has approached you for some advice. Her current portfolio appears
The question is based on the case of Mrs Smart. (a) Your client, Mrs Smart, has approached you for some advice. Her current portfolio appears as follows: Expected Annual Annual Standard Value Return Deviation (%) (%) Stocks in FTSE 100 380,000 11.6 18.3 Stocks in FTSE AIM 620,000 18.5 28.8 Historical correlation coefficient between FTSE100 and FTSE AIM is 0.75 Required: (i) Calculate Mrs Smart's portfolio return and risk. (5 marks) (ii) In no more than 100 words, comment on Mrs Smart portfolio
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