Stocks K, L, and M each has the same expected return and standard deviation The correlation coefficients between each pair of these stocks are K and L correlation coefficient 0 8 K and M correlation coefficient 0 2 L and M correlation coefficient 0 4 Given these correlations, a portfolio constructe...

The portfolio constructed containing stocks L and M ...

Stocks K, L, and M each has the same expected return and standard deviation. The correlation coefficients

Question:

K, L, and M each has the same and standard deviation. The correlation coefficients between each pair of these are:
K and L correlation coefficient = +0.8 K and M correlation coefficient = +0.2 L and M correlation coefficient = −0.4 Given these correlations, a constructed of which pair of will have the lowest standard deviation? Explain.

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...