Question: With below information justify below statement for a portfolio with two stock A and B: Statement: Portfolio diversification reduce risk even if stocks are positively

With below information justify below statement for a portfolio with two stock A and B:

Statement:

Portfolio diversification reduce risk even if stocks are positively correlated in portfolio and return cannot be more than the return of the maximum return of individual stock

StockMeanSTDWeight

A12%24%0.6

B15%30%0.4

Correlation coefficient=0.33

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