10.6 Suppose the expected returns and standard deviations of stocks A and B are 

respectively.

a. Calculate the expected return and standard deviation of a portfolio that is composed of 40 percent A and 60 percent B when the correlation coefficient between the stocks is 0.5.

b. Calculate the standard deviation of a portfolio that is composed of 40 percent A and 60 percent B when the correlation coefficient between the stocks is 0.5.

c. How does the correlation coefficient affect the standard deviation of the portfolio?

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R = 0.15,