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Your uncle wants to create a portfolio based on two stocks, Google and Apple. Google has an expected return of 18% and a standard deviation
Your uncle wants to create a portfolio based on two stocks, Google and Apple. Google has an expected return of 18% and a standard deviation of 20%. Apple has an expected return of 14% and a standard deviation of 14%. The correlation coefficient between the returns of Google and Apple is 0.4. The risk free rate is 10%.
Help your uncle construct the optimal risky portfolio. What is the weight of Google in the optimal risky portfolio?
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