USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 83

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Stocks A and B have a correlation coefficient of -0.8. The stocks' expected returns and standard deviations are in the table below. A portfolio consisting of 40% of stock A and 60% of stock B is constructed.

-Refer to Exhibit 6.14. What percentage of stock A should be invested to obtain the minimum risk portfolio that contains stock A and B?

• A) 35%
• B) 42%
• C) 58%
• D) 65%
• E) 72%

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Income earned or expenses incurred before cash has been exchanged, often recognized in the accounting process.

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