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The standard deviation of annual returns for Stock #1 is 55% and for Stock #2 is 60%. The correlation of Stock #1's returns to Stock
The standard deviation of annual returns for Stock #1 is 55% and for Stock #2 is 60%. The correlation of Stock #1's returns to Stock #2's returns is -1. If you buy $2200 worth of Stock #1, how much worth of Stock #2 must you trade in order to created a hedged portfolio of the two stocks? If you want buy Stock #2, make it a positive number and if you want to short-sell Stock #2, type a negative number.
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