Suppose you have three stocks a b c the three stocks have, Financial Management

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Suppose you have three stocks a b c the three stocks have

Suppose you have three stocks A, B, C the three stocks have the same expected return and the same standard deviation. If you know that the correlation coefficient between each pair of stocks are as follows:

The correlation between A and B is +0.9

The correlation between A and C is 0.1

The correlation between B and C is -0.6

You want to form a portfolio consists of two securities Given the correlations above, a portfolio constructed of which pair of stocks will have the lowest standard deviation? What do you conclude?

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Financial Management: Suppose you have three stocks a b c the three stocks have

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