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Use the following information for the next seven questions. Consider the following probability distribution for stocks A and B: State Probability Stock A Stock B
Use the following information for the next seven questions. Consider the following probability distribution for stocks A and B: State Probability Stock A Stock B 1 0.1 -3% 1% 2 0.2 5% 0.3 15% 19% 4 0.4 22% 119 a) What is the expected rate of return of stock A? (Format of the answer: 8.92 -- in percent, don't include symbol, round to 2 digits.) b) What is the expected rate of return of stock B? (Format of the answer: 8.92 -- in percent, don't include % symbol, round to 2 digits.) c) What is the standard deviation of stock A? (Format of the answer: 8.92 - in percent, don't include % symbol, round to 2 digits.) d) What is the standard deviation of stock B? (Format of the answer: 8.92 - in percent, don't include % symbol, round to 2 digits.) e) What is the correlation coefficient between stocks A and B? (Format of the answer: 0.92 -- in decimals, round to 2 digits. f) If you invest 40% of your money in A and 60% in B, what would be the portfolio's expected rate of return? (Format of the answer: 8.92 -- in percent, don't include % symbol, round to 2 digits.) g) If you invest 40% of your money in A and 60% in B, what would be the portfolio's standard deviation? (Format of the answer. 8.92 - in percent, don't include % symbol, round to 2 digits.)
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