Question: Suppose we obtain the following data in dollar terms: The correlation coefficient between the two markets is 0.58. Suppose that you invest equally, that is,

Suppose we obtain the following data in dollar terms:

The correlation coefficient between the two markets is 0.58. Suppose that you invest equally, that is, 50 percent in each of the two markets. Determine the expected return and standard deviation risk of the resulting international portfolio.22This problem can be solved using the spreadsheetMPTSolver.xls.

Stock Market United States United Kingdom Return (Mean) Risk (SD) 1.26% per month 1.23% per month 4.43% 5.55%

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