Question: Use the Excel file Data for Two Stocks to determine the following: Create a two-way data table that determines the standard deviations for portfolios consisting
- Use the Excel file Data for Two Stocks to determine the following:
Create a two-way data table that determines the standard deviations for portfolios consisting of combinations of Stock A and Stock B by varying the correlation coefficient value between Stock A and Stock B through the full range of possible correlation coefficient values. Use increments of 0.25 for the possible correlation coefficient values.
| Data for Two Stocks | ||
| A | B | |
| Expected return | 15.00% | 20.00% |
| Variance of return | 0.36 | 0.81 |
| Standard deviation of return | 60.00% | 90.00% |
| Correlation | 0.25 | |
| Proportion of Stock A | 0.60 | 0.4 |
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