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Homework answers / question archive / You plan to invest in Stock X, Stock Y, or some combination of the two
You plan to invest in Stock X, Stock Y, or some combination of the two. The expected return for X is 10 percent and sX = 5 percent. The expected return for Y is 12 percent and sY = 6 percent. The correlation coefficient, rXY is 0.75.
Calculate rp and sp for 100 percent, 75 percent, 50 percent, 25 percent, and 0 percent in Stock X.
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