Calculate the variance of portfolio

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Hyacinth Macaw invests 74% of her funds in stock I and the balance in stock J. The standard deviation of returns on I is 13%, and on J it is 27%.

a. Calculate the variance of portfolio returns, assuming the correlation between the returns is 1.0.

b. Calculate the variance of portfolio returns, assuming the correlation is 0.7.

c. Calculate the variance of portfolio returns, assuming the correlation is 0.

Reference no: EM13746557

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