Assume Stocks A and B have the following characteristics:

Stock	Expected Return	Standard Deviation
A	9.1%	33.1%
B	15.1%	62.1%

The covariance between the returns on the two stocks is .0011.

a.

Suppose an investor holds a portfolio consisting of only Stock A and Stock B. Find the portfolio weights, XA and XB, such that the variance of her portfolio is minimized. (Hint: Remember that the sum of the two weights must equal 1.) (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)

	Portfolio weights
Stock A
Stock B

b.	What is the expected return on the minimum variance portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Expected return

%

c.	If the covariance between the returns on the two stocks is .05, what are the minimum variance weights? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)

	Minimum variance weights
Stock A
Stock B

d.	What is the variance of the portfolio in part (c)? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.)

Variance of the portfolio