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Calculate the portfolio expected return

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Reference no: EM132920916

Problem 1: The expected return and standard deviation of asset X is 10.85% and 14.5% respectively. Similar numbers for asset Y are 5.28% and 10.86%. Using these two assets, create a portfolio. Consider the two situations: (a) using 30% of X and 70% of Y and assuming the correlation coefficient to be 0.65; (b) using 60% of X and 40% of Y and assuming the correlation coefficient to be -0.25. In each case, calculate the portfolio's expected return and standard deviation.

Reference no: EM132920916

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