The expected return on stock S is 28 percent and the expected return on stock T is 38 percent. The standard deviation of S is 26 percent and the standard deviation of T is 45 percent. The correlation between the returns of S and T is -0.55. If an investor chooses to form a two-stock portfolio with 70 percent of his investment fund in stock S, what will be the expected return and the standard deviation of the portfolio?

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To calculate the expected return and standard deviation of a twostock portfolio we need to consider ... View the full answer