Discussion Post
Here are two stocks A and B. Stock A has an expected return of 8% and a return standard deviation of 12%. Stock B has an expected return of 10% and a return standard deviation of 18%. If stock A and stock B has a correlation coefficient of -1 and the risk free asset has a return of 5%, is there an arbitrage opportunity and what is the arbitrage profit?
The response must include a reference list. Using Times New Roman 12 pnt font, double-space, one-inch margins, and APA style of writing and citations.