Question: To achieve a zero standard deviation for a portfolio, calculate the weights of stocks A and B, assuming the correlation coefficient is -1. Use the
To achieve a zero standard deviation for a portfolio, calculate the weights of stocks A and B, assuming the correlation coefficient is -1. Use the following information. (round intermediate calculations and final answers to 2 decimal places, e.g. 31.21%
| state of the economy | probability of occurrence | expected return on stock A in this state | expected return on stock B in this state |
| High Growth | 25% | 42.0% | 59.0% |
| Moderate Growth | 20% | 21.0% | 29.0% |
| Recession | 55% | -9.0% | -19.0% |
Weight stock A % Weight Stock B %
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