Question: You construct a portfolio containing two stocks, X and Y. You invest 80% of your funds in Stock X and the remainder in Stock Y.

You construct a portfolio containing two stocks, X and Y. You invest 80% of your funds in Stock X and the remainder in Stock Y. Stock X has an expected return of 8.8% and has a standard deviation of 13%. Stock Y has an expected return of 12.7% and has a standard deviation of 19%. The covariance between the two stocks is 0.01482. What is the correlation coefficient between the two stocks?

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