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Business, 29.10.2019 21:31 cavapoo

Nicholas has built a 16,000 dollar stock portfolio with a beta of 1.2, an expected return of 10.8 percent, and a standard deviation of 25%. melinda also has a 16,000 dollar portfolio, but it has a beta of 0.8, an expected return of 9.2 percent, and a standard deviation that is also 25%. the correlation coefficient between nicholas' and melinda's portfolios is zero. if nicholas and melinda marry and combine their portfolios, which of the following best describes their combined $32,000 portfolio? a. the combined portfolio's expected return will be greater than the simple weighted average of the expected returns of the two individual portfolios, 10.0%.b. the combined portfolio's standard deviation will be equal to a simple average of the two portfolios' standard deviations, 25%.c. the combined portfolio's beta will be equal to a simple weighted average of the betas of the two individual portfolios, 1.0; its expected return will be equal to a simple weighted average of the expected returns of the two individual portfolios, 10.0%; and its standard deviation will be less than the simple average of the two portfolios' standard deviations, 25%.d. the combined portfolio's standard deviation will be greater than the simple average of the two portfolios' standard deviations, 25%.

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