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What is the standard deviation of the total return

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Consider two investment options: Stock A and Stock B. Every $100 invested in Stock A yields a return with a mean of $10 and standard deviation of $3. The mean and standard deviation of return from Stock B is $5 and $1, respectively. Assume the correlation between returns of the two stocks is -0.4. Assume you invest 20% of your fund of $100 in Stock A and the remaining 80% in Stock B. What is the standard deviation of the total return of your portfolio?

Reference no: EM132855920

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