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The returns on stocks A and B are perfectly negatively correlated (P AB = -1 ). Stock A has an expected return of 21 %

  • The returns on stocks A and B are perfectly negatively correlated (PAB = -1). Stock A has an expected return of 21 % and a standard deviation of return of 40%. Stock B has a standard deviation of return of 20%. The risk-free rate of interest is 11 %. What must be the expected return to stock B?

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