Given the information in Problem 8‐1, assume now that the correlation coefficient between stocks X and Y is + 1.0. Choose the investment below that represents the minimum‐risk portfolio:

a. 100 percent investment in stock Y

b. 100 percent investment in stock X

c. 50 percent investment in stock X and 50 percent investment in stock Y

d. 80 percent investment in stock Y and 20 percent investment in stock X

Problem 8‐1

Given the following information: 

Standard deviation for stock X = 12 percent 

Standard deviation for stock Y = 20 percent 

Expected return for stock X = 16 percent 

Expected return for stock Y = 22 percent 

Correlation coefficient between X and Y = 0.30