Expected return-standard deviation of return on portfolio

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The following data represents the stock returns on assets X and Y for the 10 consecutive years.

X 22% 18% 12% 5% -1% -1% 12% 18% 22% 10%

Y 30% 15% 10% 5% -2% 5% 10% 15% 35% 12%

(a) Compute the correlation coefficient between X and Y. Comment on the results.

(b) Find the expected return and the standard deviation of the return on a portfolio consisting of 15% of asset X and 85% of asset Y. Compute the coefficient of determination.

Reference no: EM131578568

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