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You have $ 4 2 0 , 0 0 0 invested in a well - diversified portfolio. You inherit a house that is presently worth
You have $ invested in a welldiversified portfolio. You inherit a house that is presently worth $ Consider the summary measures in the following table:
Investment Expected Return Standard Deviation
Old portfolio
House
The correlation coefficient between your portfolio and the house is
a What is the the standard deviation for your portfolio comprising your old portfolio and the house?
Suppose you decide to sell the house and use the proceeds of $ to buy riskfree Tbills that promise a rate of return. Calculate the standard deviation for the resulting portfolio
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