7. You are considering two securities, Stock A and Stock B, and the following is your prediction related to the two securities after you refer to their historical cost performance. (a) Calculate the expected return and standard deviation for each asset. [Answer =14.8%,13.7%, 3.82%,0.95%] (a) You have decided to invest $60,000 in Stock A and the remaining balance of $40,000 will be used to invest in Stock B. Using this information, calculate the expected rate of return and the standard deviations for the portfolio, assuming the correlation coefficient for the stocks is 0.85 . [Answer =14.36%,2.62%] (b) Explain what will happen to your portfolio if the correlation coefficient of the two stocks is 1.0? (No calculation will be required)