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You are considering forming a portfolio using two stocks, Stock Q and Stock W . Stock Q has a beta of 1 . 3 and

You are considering forming a portfolio using two stocks, Stock Q and Stock W. Stock Q has a beta of 1.3 and the standard deviation of its returns has been estimated to be 0.5. For Stock W, the beta is 0.88 and the standard deviation is 0.45. Assuming that the risk-free rate is 4% and the market risk premium is 7%. If the correlation between the returns of Q and W is 0.65, what is the standard deviation for the portfolio that can have a target expected return of 12%?
A.
0.1593
B.
0.4413
C.
0.3991
D.
0.1948

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