2. Consider a financial market trading a wide variety of securities, i.e. risky stocks as well as riskless government bonds with yield of 6%. Assume two stocks - ABC and KLM - catch your attention and you decide to invest in them. Expected return of ABC's stock is 10% and that of KLM is 20%. Their volatilities, i.e. standard deviations of returns, are 2% and 8% respectively. 2.1. If, based on historical data, you estimate the correlation of returns between the two stocks to be 0.6, what share of your portfolio should be invested in each stock to achieve the minimum possible risk? [0.8 points] 2.2. If you have $1M to invest in the portfolio described in (2.1), explain how you would implement that portfolio. [0.8 points]