The following information is available.
|
|
Stock A |
|
Stock B |
| Expected return
Standard deviation Coefficient of correlation |
16% 15% |
0.60 |
12% 8% |
(a) What is the covariance between stocks A and B?
(b) What is the expected return and risk of a portfolio in which A and B have weights of 0.6 and 0.4?
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