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You are considering an investment in Stock A and Stock B. Your security analyst has estimated the returns on these two stocks as follows: a)

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You are considering an investment in Stock A and Stock B. Your security analyst has estimated the returns on these two stocks as follows: a) Find the expected return on each stock b) Find the covariance and correlation between the returns on the Stock A and Stock B. c) The standard deviation of the returns on Shock A (sigma_A) is 0.09605 (or 9.605%) and the standard deviation of returns for stock B (sigma_B) is 0.14151 (or 14.151%). Assume that you form a portfolio consisting of Stock A and Stock B. You invest exist3, 900 in Stock A and exist7,000 in Stock B. i. Find the weight of each stock in the portfolio. ii. Find the expected return and standard deviation of returns on the portfolio consisting of stock A and stock B

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