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You are considering an investment in the stock market and have identified two potential stocks (XYZ and ABC ) to purchase. The historical returns for
You are considering an investment in the stock market and have identified two potential stocks (XYZ and ABC ) to purchase. The historical returns for the past five years are as follows: XYZ returns: 2016: 4.60\%; 2017: 4.56\%; 2018: 9.69%;2019:14.74%; and 2020:6.29%. ABC returns: 2016:13.79%;2017:17.23%;2018:9.76%;2019:7.35%; and 2020:18.40% Calculate the standard deviation of returns for stock XYZ over the past five years. A Calculate the correlation coefficient between the two stocks over the past five years. A Assuming 50 percent of the portfolio is invested in each of the two stocks, what is the standard deviation of returns for the portfolio over the past five years? A
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