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You are considering investing in two securities, X and Y. The following data are available for the two securities: Security X Security Y Expected return
You are considering investing in two securities, X and Y. The following data are available for the two securities: Security X Security Y Expected return 0.10 0.07 Standard deviation of returns 0.08 0.04 Beta 1.10 0.75 a. If you invest 40 percent of your funds in Security X and 60 percent in Security YandifthecorrelationofreturnsbetweenXandYis+0.5,computethe following: i. The expected return from the portfolio ii. The standard deviation of returns from the portfolio b. What happens to the expected return and standard deviation
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