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1.Stock X has an expected return of 12% and a variance of .04. Stock Y has...

1.Stock X has an expected return of 12% and a variance of .04. Stock Y has an expected return of 24% and a variance of .14. Stocks X and Y have a correlation coefficient of –.4. Calculate the expected return (in %) and standard deviation (in %) of a portfolio consisting of $20,000 invested in stock X and $30,000 invested in stock Y.

Unless stated otherwise, compounding is annual and payments occur at the end of the period.

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Answer: Stockx: Expected Return = 121 = Rx- Variance - 0.04 - 87 Stock Y: Expected Return = 24% = Ry Voriance = 0.14 = 6² Cor(о. Тя 0.04 + обобон + ахоч ҳ0.6x o. ax 0.374165 х(-0.40) yo.oo64 + 0,0 soч - 0.0 437 | О.Оч ач 3 - go.s97. је до. (67

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