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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

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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 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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