What is the arbitrage profit

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Here are two stocks A and B. Stock A has an expected return of 8% and a return standard deviation of 12%. Stock B has an expected return of 10% and a return standard deviation of 18%. If stock A and stock B has a correlation coefficient of -1 and the risk free asset has a return of 5%, is there an arbitrage opportunity and what is the arbitrage profit?

Reference no: EM133186657

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