Calculate expected return of the portfolio

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Suppose that Stock A has an expected return of 7% and a volatility of 21%, while Stock B has an expected return of 4% and volatility of 7%. These two stocks are perfectly negatively correlated 03., their correlation coefficient is -1)

1. Calculate the portfolio weights that remove all risk. Explain your answer.

2. Use the portfolio weights found in question 43) to calculate the expected return of the portfolio. 

Reference no: EM133227509

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