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The one-month riskfree rate is 0.4%. Risky asset A has a mean return of 1.50% a month and a standard deviation of 10%. Risky asset B has a mean return of 0.8 a month and a standard devation of 5%. The correlation between the returns of A and B is 0.4
Form 11 portfolios of stocks A and B as follows:
Portfolio 1 has weight and 1 on A and 0 on B
Portfolio has weight of 0.9 on A and 0.1 on B
Etc.
Portfolio 11 has weight of 0 on A and 1 on B
Compute the standard deviation of its return.
(Can you help me figure out at least 1 or 2 portfolios for the standard deviation? I don't understand the formula for the variance and how to calculate the covariance)
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