Arbor Systems and Gencore stocks both have a volatility of 40%. Compute the volatility of a portfolio with 50% invested in each stock if the correlation between the stocks is

(a) +1.00,

(b) 0.50,

(c) 0.00,

(d)0.50,

(e)1.00.

In which of the cases is the volatility lower than that of the original stocks?

If the correlation is +1.00, the volatility of the portfolio is: