Mr amp mrs shaw invest 60 of funds in stock a and the, Ask an Expert

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Mr. & Mrs. Shaw invest 60% of funds in stock A and the remainder in stock B. The standard deviation of returns for stock A is 10% and stock B it is 20%. Calculate the variance of portfolio returns and standard deviation assuming the correlation between the returns is 1.0; assume the correlation is .5, Explain the different results between the two correlations, and which correlation has more risk?

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