Consider your portfolio of mcdonalds and microsoft stock, Ask an Expert

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Consider your portfolio of McDonalds and Microsoft stock. The McDonalds investment comprises 35% of the portfolio and the remaining 65% of the portfolio is invested in Microsoft. The two stocks exhibit a correlation of returns equal to 50%. If the expected standard deviations for McDonalds and Microsoft are 19% and 30%, respectively, then what is the expected standard deviation of the portfolio?

a) 19.81% b) 20.60% c) 23.54% d) 26.15% e) 27.45%

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Financial Management, Finance

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