Question: Calculate the expected return and standard deviation when the correlation coefficient between the stocks is 0.5 ( 4 marks) i) Calculate the standard deviation when

Calculate the expected return and standard deviation when the correlation coefficient

Calculate the expected return and standard deviation when the correlation coefficient between the stocks is 0.5 ( 4 marks) i) Calculate the standard deviation when the correlation coefficient between the stocks is 0.5 ( 3 marks) iii) Demonstrate by appropriate calculations whether or not diversification has been achieved (4 marks) iv) Based on parts i) and ii) above how does the correlation coefficient affect the standard deviation of the portfolio (4 marks) Calculate the expected return and standard deviation when the correlation coefficient between the stocks is 0.5 ( 4 marks) i) Calculate the standard deviation when the correlation coefficient between the stocks is 0.5 ( 3 marks) iii) Demonstrate by appropriate calculations whether or not diversification has been achieved (4 marks) iv) Based on parts i) and ii) above how does the correlation coefficient affect the standard deviation of the portfolio (4 marks)

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