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Expected Return of Asset 1 = 10% Expected Return of Asset 2 = 15% The standard deviation of Asset 1s return = The standard d

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Answer #1
Variance =( w2A*σ2(RA) + w2B*σ2(RB) + 2*(wA)*(wB)*Cor(RA, RB)*σ(RA)*σ(RB))
Variance =0.3^2*0.03^2+0.7^2*0.05^2+2*0.3*0.7*0.03*0.05*0.4
Variance 0.00156
Standard deviation= (variance)^0.5
Standard deviation= 3.95% = 0.0395
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