d$)$ There are two stocks in the economy, stocks A and B$.$ Stock A has an expected return of $10\%$ and

a standard deviation of $20\%.$ Stock B has an expected return of $15\%$ and a standard deviation of

$30\%.$ The correlation between the returns of A and $B$ is $-0\mathrm{.}1.$ Assume that investors in this

economy can form portfolios using a combination of these two stocks in any way they see fit.

Further, assume that investors in this economy are rational in that they like higher returns and

don't like risk, and these are the only elements they base their investment decisions on$.(10$

points$)$

I. Would any rational investor invest only in stock $A($this is$,$ invest in a portfolio that is

$100\%$ in A and $0\%$ in $B?$ Explain

II$.$ Would any rational investor invest only in stock B $($this is$,$ invest in a portfolio that is

$100\%$ in B and $0\%$ in B$)?$ Explain