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Compute the correlation coefficient between the two securities below:

Probability Security A Security B

20% 7% 9%

40% 5% 6%

30% 7% 4%

10% 15% 6%

If two securities are uncorrelated, one of the securities must be the risk-free security. How valid is this statement based on the calculation of the correlation coefficient in this instance?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92414809

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