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You can't form a riskless portfolio out of two risky assets - no matter how their returns are correlated. For example, if Asset A has

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You can't form a riskless portfolio out of two risky assets - no matter how their returns are correlated. For example, if Asset A has a standard deviation of returns of 30% p.a. and Asset B a standard dev)ation of returns of 20% p.a., any portfolio consisting of an investment in these /0 assets will have risk associated with it

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