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The standard deviation of expected returns for investments X and Y is equal to 3 . 5 % and 8 . 5 % , respectively.

The standard deviation of expected returns for investments X and Y is equal to 3.5% and 8.5%, respectively. The correlation between returns for X and Y is -0.20. How much risk reduction, that is diversification benefit in basis points, does the minimum risk portfolio provide?

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