Business, 28.10.2019 21:31 WOLFIEPOOF

Stocks a, b, and c are similar in some respects: each has an expected return of 10% and a standard deviation of 25%. stocks a and b have returns that are independent of one another; i. e., their correlation coefficient, r, equals zero. stocks a and c have returns that are negatively correlated with one another; i. e., r is less than 0. portfolio ab is a portfolio with half of its money invested in stock a and half in stock b. portfolio ac is a portfolio with half of its money invested in stock a and half invested in stock c. which of the following statements is correct?
a. portfolio ab has a standard deviation that is greater than 25%.
b. portfolio ac has an expected return that is less than 10%.
c. portfolio ac has a standard deviation that is less than 25%.
d. portfolio ab has a standard deviation that is equal to 25%.
e. portfolio ac has an expected return that is greater than 25%.

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Stocks a, b, and c are similar in some respects: each has an expected return of 10% and a standard...

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