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The following data have been acquired for the S&P 500 and an index of Russian stocks:

Year Market Return Russia

1998 27% 25%

1997 12% 5%

1996 -3% -5%

1995 12% 15%

1994 -3% -10%

1993 27% 30%

Does it make sense to add an index of Russian Stocks to your portfolio? can you reduce the risk of your portfolio at no loss in return by doing so?

Can you please help guide me how to answer this question?

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