Question: Exercise #2: Risk. Consider the following data for two risky stocks Rate of Return Year ABC XYZ 2013 ?5 % +19 % 2012 +20 +10

Exercise #2: Risk. Consider the following data for two risky stocks Rate of Return

Year

ABC

XYZ

2013

?5

%

+19

%

2012

+20

+10

2011

+27

+4

Calculate the expected rate of return and standard deviation for a portfolio invested 35% in ABC and 65% in XYZ.

ER35/65= =

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