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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 Stock A and Stock B. c) The standard deviation of returns for Stock A (sigma_A) is 0.09605 (or 9.605%) and the standard deviation of returns for Stock B (sigma_) is 0.14151 (or 14151%). Assume that you form a portfolio consisting of Stock A and Stock B. You invest exist3,000 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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