d. On the basis of your findings, which of the three investment alternatives do you recommend? Why? 4 P8-15 Correlation, risk, and return Matt Peters wishes to evaluate the risk and return be- haviors associated with various combinations of assets V and W under three as- sumed degrees of correlation: perfectly positive, uncorrelated, and perfectly negative. The expected returns and standard deviations calculated for each of the assets are shown in the following table. Expected return, 8% Risk (standard deviation), o, V 5% W 13 10 CHAPTER 8 Risk and Return 333 a. If the returns of assets V and W are perfectly positively correlated (correlation coefficient +1), describe the range of (1) expected return and (2) risk associ- ated with all possible portfolio combinations. b. If the returns of assets V and W are uncorrelated (correlation coefficient 0), describe the approximate range of (1) expected return and (2) risk associated with all possible portfolio combinations. c. If the returns of assets V and W are perfectly negatively correlated (correlation coefficient -1), describe the range of (1) expected return and (2) risk associ- ated with all possible portfolio combinations