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You have the following information regarding rates of return for two stocks (A and B); Rate of Return. Probability Stock A Stock B 0.1 5
You have the following information regarding rates of return for two stocks (A and B); Rate of Return. Probability Stock A Stock B 0.1 5 25 0.410 20 1510 20 5 Expected rate of return (A)=12.5\% Expected rate of return (B)=15\% Standard deviation (A)=4.0311\% Standard deviation (B)=6.3246\% Suppose you want to construct a portfolio with A and B with a return objective you want the expected rate of return your portfolio to be 14%) of 14 %What will be the risk (standard deviation) of your portfolio ?
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