Question

FinCorp Inc. wishes to examine the effect of correlation on the efficient frontier that can be created by investing in ABC and FGI. The expected return of ABC is 6 percent, with a standard deviation of 10 percent. The expected return of FGI is 10 percent, with a standard deviation of 25 percent. Graph the efficient frontier for
a. A correlation of 0.0
b. A correlation of −0.5
c. A correlation of 0.5



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  • CreatedFebruary 25, 2015
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