Assume that your cousin holds just one stock, Eastman Chemical Bonding $($ECB$),$ which he thinks has very little risk. You agree that the stock is relatively

safe, but you want to demonstrate that his risk would be even lower if he were more diversified. You obtain the following returns data for Wilder's Creations

and Buildings $($WCB$).$ Both companies have had less variability than most other stocks over the past $5$ years. Measured by the standard deviation of returns,

by how much would your cousin's risk have been reduced if he had held a portfolio consisting of $90\%$ in ECB and the remainder in WCB$?($Hint: Use the

sample standard deviation formula.$)$

Select the correct answer.

a$.1\mathrm{.}16\%$

b$.1\mathrm{.}21\%$

c$.1\mathrm{.}26\%$

d$.1\mathrm{.}36\%$

e$.1\mathrm{.}31\%$