Question: Consider the following data on returns (R), standard deviation (), and correlations (r) for two stocks: R1 = 10%, 1 = 4%, R2 = 20%,

Consider the following data on returns (R), standard deviation (), and correlations (r) for two stocks:

R1 = 10%,

1 = 4%,

R2 = 20%,

2 = 6%,

r12 = -1.0

Find the weights of stocks 1 and 2 (W1 and W2) that will yield the minimum variance of a portfolio of stocks 1 and 2.

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