The two entities have the following properties. Calculate the expected return and standard deviation of an equally weighted portfolio if the correlation coefficient is 0.1. If the correlation coefficient is 0.9, calculate the expected return and standard deviation of the equally weighted portfolio. Which correlation coefficient provided a better risk-return profile? Explain.

stock up	E(R)	p
1	0.12	20%
2	0.15	25%

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SOLUTION To calculate the expected return and standard deviation of the equally weighted portfolio we can use the following formulas Expected return o... View the full answer