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Consider a portfolio that contains two stocks. Stock "A" has an expected return of 10% and...

Consider a portfolio that contains two stocks. Stock "A" has an expected return of 10% and a standard deviation of 20%. Stock "B" has an expected return of -10% and a standard deviation of 25%. The proportion of your wealth invested in stock "A" is 60%. The correlation between the two stocks is 0.

What is the expected return of the portfolio? Enter your answer as a percentage. Do not include the percentage sign in your answer.

Enter your response below rounded to 2 DECIMAL PLACES.

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Answer #1

Expected return 2.00% (0.1*0.6)+(-0.1*0.4)

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