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Calculate the variance of return on the portfolio

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Reference no: EM133008524

An investor invests 20 per cent of her funds in Company A's shares and the remainder in Company B's shares. The standard deviation of the returns on A is 10 per cent and on B is 16 per cent.

Required:

Problem 1: Calculate the variance of return on the portfolio assuming the correlation between the returns on the two securities is:

1)+1.0
2)+0.3
3)0
4)-0.3

Reference no: EM133008524

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