Here are some historical data on the risk characteristics of Bank of America and Starbucks.

	Bank of America	Starbucks
(beta)	1.21	.68
Yearly standard deviation of return (%)	32.0	16.2

Assume the standard deviation of the return on the market was 11%. (Use decimals, not percents, in your calculations.)

a. The correlation coefficient of Bank of America's return versus Starbucks is .39. What is the standard deviation of a portfolio invested half in each stock? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Standard deviation %

b. What is the standard deviation of a portfolio invested one-third in Bank of America, one-third in Starbucks, and one-third in risk-free Treasury bills? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Standard deviation %

c. What is the standard deviation if the portfolio is split evenly between Bank of America and Starbucks and is financed at 50% margin, that is, the investor puts up only 50% of the total amount and borrows the balance from the broker? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Standard deviation %

d-1. What is the approximate standard deviation of a portfolio comprised of 100 stocks with betas of 1.21 like Bank of America? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Standard deviation %

d-2. What is the approximate standard deviation of a portfolio comprised of 100 stocks with betas of .68 like Starbucks? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Standard deviation %