a. If Mary invests half her money in each of the two common stocks, what is the portfolio's expected rate of return and standard deviation in portfolio return?

b. Answer part a where the correlation between the two common stock investments is equal to zero.

c. Answer part a where the correlation between the two common stock investments is equal to

plus+1.

d. Answer part a where the correlation between the two common stock investments is equal to

minus1.

e. Using your responses to questions

along dashd ,

describe the relationship between the correlation and the risk and return of the portfolio.

omework: Chapter 8 Homework Save core: 0 of 1 pt 2 of 9 (6 complete) HW Score: 61.11%, 5.5 or 9 pts 8-3 (similar to) Question Help (Computing the standard deviation for a portfolio of two nsky investments) Mary Guilott recenty graduated from Nichols State University and is anxious to begin investing her meager savings as a way of applying what she has learned in business school. Specifically, she is evaluating an investment in a portfolio comprised of two firms' common stock. She has collected the following information about the common stock of Firm A and Firm B if Mary invests half her money in each of the two common stocks, what is the portfolio's expected rate of return and standard deviation in portfolio return? b. Answer part a where the correlation between the two common stock investments equal to zero c. Answer part a where the correlation between the two common stock investments is equal to 1. d. Answer part a wmere the correlation between the two common stock investments is equal to-1 e. Using your responses to questions a-d, describe the relationship between the correlation and the risk and return of the portfolio a. If Mary decides to invest 50% of her money in Firm A's common stock and 50% in Fim B's common stock and the correlation between the two stocks is 0 40 then the expected rate of return in the portfolo is % Round to two decimal places Data Table Firm A's common stock Firm B's common stock Correlation coefficient Expected Return 0.17 0.17 0.40 Standard Deviation 0.19 0.21 Print Done Enter your answer in the answer box and then click Check