Calculate the standard deviation of a portfolio of 50 in


Here are the expected returns and standard deviations of returns for two investments:

Stock A Er 10% SD 15%

Stock B Er 15% SD 25%

Calculate the standard deviation of a portfolio of 50% in Stock A and 50% in Stock B, assuming the stock returns have:

a. perfect positive correlation

b. perfect negative correlation

c. zero correlation

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