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    Standard deviation of return for a portfolio

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    Stock X has a standard deviation of return of 10%. Stock Y has a standard deviation of return of 15%. The correlation coefficient between stocks is 0.5. If you invest 60% of the funds in stock X and 40% in stock Y, what is the standard deviation of a portfolio? Justify your answer.

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    Solution Preview

    Stock X has a standard deviation of return of 10%. Stock Y has a standard deviation of return of 15%. The correlation coefficient between stocks is 0.5. If you invest 60% of the funds ...

    Solution Summary

    This solution calculates standard deviation of return for a portfolio that has two stocks.

    $2.19

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