Utilizing the information below on 2 recently purchased stocks, compute the risk of the portfolio for the different levels of correlation between the 2 securities: Stock A B Expected Return 0.14 0.17 Std Dev of returns 0.11 0.11 Proportion invested 0.35 0.65 Correlation coefficient 1 0.4 0.1 0 -0.4 -1
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Utilizing the information below on 2 recently purchased stocks, compute the risk of the portfolio for the different levels of correlation between the 2 securities:
Stock | A | B |
Expected Return | 0.14 | 0.17 |
Std Dev of returns | 0.11 | 0.11 |
Proportion invested | 0.35 | 0.65 |
Correlation coefficient |
1 |
0.4 |
0.1 |
0 |
-0.4 |
-1 |
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