Construct a portfolio with positive weights

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Reference no: EM132019574

Suppose Tex stock has a volatility of 40%?, and Mex stock has a volatility of 22%.

If Tex and Mex are? uncorrelated,

a. Construct a portfolio with positive weights in both stocks and that has the same volatility as MEX alone.

b. What portfolio of the two stocks has the smallest possible volatility?

Reference no: EM132019574

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