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Portfolio return and standard deviation Personal Finance Problem Jamie Wong is thinking of building an investment portfolio containing 60% of the dollar value of the portfolio, and stock M will account for the other 40% The historical returns over the next 6 years, 2013 - 2018 following table: E a. Calculate the actual portfolio return, p, for each of the 6 years b. Calculate the expected value of portfolio returns, ip, over the 5-year period c. Calculate the standard deviation of expected portfolio returns, over the 6-year period d. How would you characterize the correlation of returns of the two stocks L and M? e. Discuss any benefits of diversification achieved by Jamie through creation of the portfolio turn and standard deviation Personal Finance Problem Jamie Wong is thinking of building an investment portfolio containing two stock and M Stock L will present dollar value of the portfolio and stock M will account for the other 40% The historical returns over the next 6 years 2013 - 2010. for each of these studies are shown in the the actual portfolio return, le for each of the years the expected value of portfolio returns. (p over the 6-year period the standard deviation of expected portfolio returns, or over the 6-year period wuld you characterize the correlation of retums of the two stocks L and M? any benefits of diversification achieved by Jamie through creation of the portfolio CE mual portfolio retum for year 2013 (% (Round to two decimal places) - X Data table tual portfolio rotum. pected value of portfo andard deviation of ex characterize the corre efits of diversification (Click on the icon here in order to copy the contents of the data table below into a spreadsheet) Expected return Year Stock Stock M 2013 14% 24% 2014 15% 22% 2015 17% 20% 2016 17% 18% 2017 17% 16% 2018 17% 14% olio return for year 201 e this View ar par all Che Print Done

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