2. Common stocks D,E, and F have the following characteristics with respect to expected return, standard deviation, and correlation between them: 0.40 R; O lj,k Common stock D 0.08 0.02 between D and E Common stock E 0.15 0.16 between D and F 0.60 Common stock F 0.12 0.08 between E and F 0.80 a. What is the expected return and standard deviation of a portfolio composed of 20 percent of funds invested in stock D, 30 percent of funds in stock E, and 50 percent of funds in stock F? b. If the betas of stock D, E and F are 0.8, 1.5, and 1.2, with the same weights as in (a), what is the beta of the portfolio? (This question needs the knowledge of CAPM, can be done along with other questions in assignment 5). 2. Common stocks D,E, and F have the following characteristics with respect to expected return, standard deviation, and correlation between them: 0.40 R; O lj,k Common stock D 0.08 0.02 between D and E Common stock E 0.15 0.16 between D and F 0.60 Common stock F 0.12 0.08 between E and F 0.80 a. What is the expected return and standard deviation of a portfolio composed of 20 percent of funds invested in stock D, 30 percent of funds in stock E, and 50 percent of funds in stock F? b. If the betas of stock D, E and F are 0.8, 1.5, and 1.2, with the same weights as in (a), what is the beta of the portfolio? (This question needs the knowledge of CAPM, can be done along with other questions in assignment 5)