Stock A 's returns have a standard deviation of 0.5, and stock B's returns have standard deviation of 0.6. The correlation coefficient between A and B 0.5. What is the variance of a portfolio composed of 70 percent Stock A and 30 percent Stock B?
A) 0.1549
B) 0.2179
C) 0.4668
D) 0.5500
Correct Answer:
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