There are two risky assets in the financial market if an


There are two risky assets in the financial market.

If an investor decides to invest 40% into A and correlation coefficient between A and B is .4, compute the expected return and standard deviation for the risky portfolio.

If correlation coefficient between A and B is -1, how much will you invest into A if you want to fully hedge your risky portfolio? In this case, what is the expected return for your risky portfolio?

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Financial Management: There are two risky assets in the financial market if an
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