Calculate the risk of the two-security portfolio

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1. Calculate the risk (standard deviation) of the following two-security portfolio if the correlation coefficient between the two securities is equal to -0.6.

Return

STD. Deviation Weight (in the port)

Security A 10 0.3

Security B 20 0.7

2. Is it a great idea to combine the above assets (A and B) in a portfolio? Explain in 4 short sentences.

Reference no: EM131555171

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