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Calculate the standard deviation of the portfolio

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Reference no: EM133018568

A portfolio is made up of 75% of stock 1, and 25% of stock 2. Stock 1 has a variance of 0.08,and stock 2 has a variance of 0.035.

The correlation coefficient between the stocks is 0.6.

a. Calculate the standard deviation of the portfolio.

b. Calculate the standard deviation of a portfolio that consists of 60% stock 1 and 40% risk-free asset.

Reference no: EM133018568

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