is evaluating an investment in a portfolio comprised of two firms' common stock. She has collected the following information about the common stock of Firm A and Firm B: $$

a$.$ If Mary invests half her money in each of the two common stocks, what is the portfolio's expected rate of return and standard deviation in portfolio return?

b$.$ Answer part a where the correlation between the two common stock investments is equal to zero.

c$.$ Answer part a where the correlation between the two common stock investments is equal to $+1.$

d$.$ Answer part a where the correlation between the two common stock investments is equal to $-1.$

e$.$ Using your responses to questions $a-d,$ describe the relationship between the correlation and the risk and return of the portfolio.

a$.$ If Mary decides to invest $50\%$ of her money in Firm A$\text{'}$s common stock and $50\%$ in Firm B$\text{'}$s common stock and the correlation between the two stocks is $0\mathrm{.}70,$ then the expected rate of return in the portfolio is

$\%.($Round to two decimal places.$)$

The standard deviation in the portfolio is : $($Round to two decimal places.$)$

b$.$ If Mary decides to invest $50\%$ of her money in Firm A$\text{'}$s common stock and $50\%$ in Firm B$\text{'}$s common stock and the correlation between the two stocks is zero, then the expected rate of return in the portfolio is

$\%.($Round to two decimal places.$)$

The standard deviation in the portfolio is : $($Round to two decimal places.$)$

c$.$ If Mary decides to invest $50\%$ of her money in Firm A$\text{'}$s common stock and $50\%$ in Firm B$\text{'}$s common stock and the correlation coefficient between the two stocks is $+1,$ then the expected rate of return in the porfolio is

The standard deviation in the portfolio is

$\%.($Round to two decimal places.$)$

The standard deviation in the portfolio is

$\%.($Round to two decimal places.$)$

e$.$ Using your responses to questions a$-$d$,$ which of the following statements best describes the relationship between the correlation and the risk and return of the portfolio? $($Select the best choice below.$)$

A$.$ The correlation coefficient has no effect on the expected return of a porfolio, but the closer the correlation coefficient is to negative one, $-1,$ the higher the risk.

B$.$ The correlation coefficient has no effect on the expected return of a portfolio, but the closer the correlation coefficient is to negative one, $-1,$ the lower the risk.

C$.$ The correlation coefficient has no effect on the expected return of a portfolio, but the closer the correlation coefficient is to one, the lower the risk

D$.$ The correlation coefficient has a negative effect on the expected return of a porfolio, and the closer the correlation coefficient is to negative one, $-1,$ the lower the risk.

Data table