Find correlation coefficient between the returns


A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 21%, while stock B has a standard deviation of return of 27%. Stock A comprises 70% of the portfolio, while stock B comprises 30% of the portfolio. If the variance of return on the portfolio is .045, the correlation coefficient between the returns on A and B is _________.

i) .707
ii) .191
iii) .212
iv) .495

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Finance Basics: Find correlation coefficient between the returns
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