(2) A fund manager is considering investing money in two stocks with expected returns of 8% and 12% respectively. Assume further that they have standard deviations of 15% and 25% respectively and a correlation of 0.4. (a) What is the expected return and risk for an equally weighted ( 50% in each) portfolio ? [5 Marks] (b) How can you form a portfolio which has an expected return of 15% ? What is the risk of that portfolio ? [5 Marks]