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Verified Solution

Question

Accounting

1.

Year

Security A HPR

Security B HPR

1

2%

26%

2

14%

11%

3

5%

17%

Mean

7.00%

18.00%

Std. dev.

6.24%

7.55%

A portfolio consists of two securities, A and B. The annual security HPRs, arithmetic average HPRs, and standard deviations of the HPRs are above. What is the correlation coefficient for these securities?

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