1. Compute the correlation between assets A and B if you know that the standard devi- ation of B is 50% of the standard deviation of A and the covariance between the two assets is 0.5 times the variance of asset A.

2. What is the risk (measured as the variance) of the portfolio created by investing 50% in asset A and 50% in asset B in the previous point? Assume that the variance of asset A is 4/9.