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Two stock abc and xyz have expected returns of 30% and 40% with standard deviation of 15% and 20% respectively. What will be average return and risk if 40% of ones. Funds are invested in ABC and 60% are invested in XYZ

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Solution Summary

The formula for average risk is applied.

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The expected return of stock ABC, r1=30%, the expected return of stock XYZ, r2=40%
The standard deviation of stock ABC, σ1=15%, the standard deviation of stock ...

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