Essay
Returns on the stock of First Boston and Midas Metals for the years 2010-2013 are shown below.
a. Compute the average annual return for each stock and a portfolio consisting of 50% First Boston and 50% Midas.
b. Compute the standard deviation for each stock and the portfolio.
c. Are the stocks positively or negatively correlated and what is the effect on risk?
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c. The two stocks are negatively correl...View Answer
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Correct Answer:
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c. The two stocks are negatively correl...View Answer
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