Would the portfolio be more or less risky with the change

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Question: A hedge fund has created a portfolio using just two stocks. It has shorted $24,000,000 worth of Oracle stock and has purchased $98,000,000 of Intel stock. The correlation between? Oracle's and? Intel's returns is 0.63. The expected returns and standard deviations of the two stocks are given (An increase in the correlation would decrease the variance of the portfolio, meanwhile the expected return of the portfolio would remain constant. The riskiness of the portfolio would decrease). Suppose the correlation between Intel and Oracle's stock increases, but nothing else changes. Would the portfolio be more or less risky with this change?

Reference no: EM131981027

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