A college student owns two securities: Apple and Coca- Cola. Apple has an expected return of 15 percent with a standard deviatio
n of those returns being 11 percent. Coca-Cola has an expected return of 12 percent, and a standard deviation of 7 percent. The correlation of returns between Apple and Coca-Cola is 0.81. If the portfolio consist of $6,000 in Coca-Cola and $4,000 in Apple, what is the expected standard deviation of portfolio returns? Hint: check the calculation of standard deviation for a portfolio of two stocks.
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