Question: You construct a portfolio containing two stocks, X and Y. You invest 65% of your funds in Stock X and the remainder in Stock Y.

You construct a portfolio containing two stocks, X and Y. You invest 65% of your funds in Stock X and the remainder in Stock Y. Stock X has an expected return of 8.1% and has a standard deviation of 15%. Stock Y has an expected return of 11.2% and has a standard deviation of 17%. The correlation between the two stocks is -0.5. What is the covariance between the two stocks?

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