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(Computing the standard devlation for a portfollo of two risky investments) Mary Culot recontlly graduated from colege and is walualing an inveatment in two companies'

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(Computing the standard devlation for a portfollo of two risky investments) Mary Culot recontlly graduated from colege and is walualing an inveatment in two companies' commion slock She has collected the folowing informaton about the common stock of Fim A and Fim B pontolo retum? portose roturn? c. Aecorpete you responses io both quentars a tha b. where the comelation between the tho frma' ntack retums is -0.30 d. Summarise what your whayls tels you about portholo rak ahen combining riky assets in a portlolo. Uf Mary decides to ivvest 10\% of her maney in Five As common stock and 90% in Fim Bs common stock and the corrilation coeficent betseen lise fwo stocks is 0.30 , then the expected rate shen in the portlolio is 1. (Round to two decimal placet) The standard deviation in the portolio is 4. (Rourd to twa decimal places) b. I Mary decides to invest pow of her money in Frm A corrmon siock and 10W in Fem B's common stock and the correlaton coefficiont between the two stocks is 030 , then the expocted tale o retarn in the portolio in i. (Rround to two decinal places) The standard deviation in the portfolio is 4. (Round to two decinal places) df relum in tha gortiolio is 4. (Round to two decimal places) The standerd deviation in the portolio is 4. (Fiound to twe decimal places) retum in the portolo is. (Round ta reo decimal places). The standard deviston of the porttolo is \&. (Round lo wo doomal places) d. What doet your analysis tel you about portfolo thk when combining tiky assets in a portolio? (Select the best eloice bolow) A. You can maintain the ssme return in a portolio but lower risk more if the sock ace pondtvely conelated rather than negathely cometanted. can itso be lowored by miveving a higher proporion of the portolo in stack with lower standard devation, this however wil reduce intum

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