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What is the standard deviation of your portfolio

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Reference no: EM132956143

Question - Stock X has a standard deviation of returns of 10%. Stock Y has a standard deviation of returns of 20%. The correlation coefficient between the two stocks is 0.5.

a) If you invest 40% of your funds in stock X and 60% in stock Y, what is the standard deviation of your portfolio?

b) What special role does the correlation coefficient play in the standard deviation of a portfolio of investments?

Reference no: EM132956143

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