Question: Suppose Johnson & Johnson and Walgreen Boots Alliance have expected returns and volatilities shown here, Expected Return (%) Standard Deviation (%) Johnson & Johnson 7.3

Suppose Johnson & Johnson and Walgreen Boots Alliance have expected returns and volatilities shown here,

Expected Return (%) Standard Deviation (%)

Johnson & Johnson 7.3 14.4

Walgreens Boots Alliance 9.6 19.8

with a correlation of 20%.

Calculate

(a) the expected return and

(b) the volatility (standard deviation) of a portfolio that is equally invested in Johnson & Johnson's and Walgreens' stock.

with a correlation of 20%. Calculate (a) the expected return and (b) the volatility (standard deviation) of a portfolio that is equally invested in Johnson & Johnson's and Walgreens' stock.

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