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Find estimated mean and standard deviation

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Reference no: EM132811869

Add a new stock, stock 4, to the portfolio optimization model. Assume that the estimated mean and standard deviation of return for stock 4 are 0.125 and 0.175 respectively. Also, assume the correlations between stock 4 and the original three stocks are 0.3, 0.5 and 0.8. Run Solver on the modified model, where the required expected portfolio return is again 0.12. Is stock 4 in the optimal portfolio?

Spreadsheet Model on Page 745 Business Analytics 6th Edition.

Reference no: EM132811869

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