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Financial Risk Manager Part 1

Financial Risk Manager Part 1

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A value-oriented fund manager in search of undervalued stocks is evaluating the returns of two technology stocks, stock J and stock K. The manager estimates that the correlation between the returns of stock J and stock K is 0.37, and the corresponding covariance is 0.0054. If the standard deviation of the returns on stock K is 0.11, what is the variance of the returns on stock J?

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