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The expected returns, standard deviations and correlation between Xerox (XRX) and Yahoo! (YHOO) are shown below: r E(r) s XRX YHOO XRX 11% 20% 1 0.3 YHOO 15% 35% 1 Draw...

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Finance

The expected returns, standard deviations and correlationbetween Xerox (XRX) and Yahoo! (YHOO) are shown below:

r

E(r)

s

XRX

YHOO

XRX

11%

20%

1

0.3

YHOO

15%

35%

1

Draw the combination line for portfolios of these twostocks.

Answer & Explanation Solved by verified expert
4.4 Ratings (782 Votes)
XRXAsset1 YAHOOAsset 2Return of asset1R11100Return of asset2R21500Standard Deviation of asset1S12000Standard Deviation of asset2S23500Variance of asset 1V1400202Variance of asset 2V21225352Covariance of    See Answer
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Transcribed Image Text

The expected returns, standard deviations and correlationbetween Xerox (XRX) and Yahoo! (YHOO) are shown below:rE(r)sXRXYHOOXRX11%20%10.3YHOO15%35%1Draw the combination line for portfolios of these twostocks.

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