Risk associated with all possible portfolio combinations

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Matt Peters wishes to evaluate the risk and return behaviors associated with various combinations of assets V and W under three assumed degrees of correlation: perfect positive, uncorrelated, and perfect negative. The expected returns and standard deviations calculated for each of the assets are shown in the following table.
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a. If the returns of assets V and W are perfectly positively correlated (correlation coefficient = +1), describe the range of 

(1) Expected return and 

(2) Risk associated with all possible portfolio combinations.

b. If the returns of assets V and W are uncorrelated (correlation coefficient = 0), describe the approximate range of 

(1) Expected return and

(2) Risk associated with all possible portfolio combinations.

c. If the returns of assets V and W are perfectly negatively correlated (correlation coefficient = -1), describe the range of 

(1) Expected return and

(2) Risk associated with all possible portfoliocombinations.

Reference no: EM131107233

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