3) Stocks of companies ABC and XYZ have mean expected return of 105. and 20% respectively, ABC has a standard deviation of 15% and XYZ has a standard deviation of 30 percent. Based on past returns we see that the correlation coefficient between these two stocks is 0. Is this an important piece of information to a potential investor in these two stocks? Explain any possible benefits from holding both shares a) Alernatively, if the correlation coefficient between the two stocks is 1 Will a combination of ABC and XYZ dominate investing in either of the two individually? Explain! b) On the basis of diversification, how many stocks should you hold in your portfolio? c To be fully diversified, how much of their stock portfolio should investors invest in local (domestic) company stocks