Question: Question 8: Suppose the expected returns and standard deviations of Stocks A and B are E(RA) = .11, E(RB) = .13, A = .39, and

 Question 8: Suppose the expected returns and standard deviations of Stocks

Question 8: Suppose the expected returns and standard deviations of Stocks A and B are E(RA) = .11, E(RB) = .13, A = .39, and ob = 76. 1. Calculate the expected return and standard deviation of a portfolio that is composed of 35 percent A and 65 percent B when the correlation between the returns on A and B is .5. 2. Calculate the standard deviation of a portfolio with the same portfolio weights as in part (a) when the correlation coefficient between the returns on A and B is -.5. 3. How does the correlation between the returns on A and B affect the standard deviation of the portfolio

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