Let (X, Y): s be the return rates (%) on two stocks A and B over the past 10 years. A few of the summary statistics are: an(X:s) = 5, Sx = sd(X:s) = 3, y = mean(Y:s) = 8, The return rate on a portfolio made up of a 100% of stock A and (1 a) 100% of stock B is R= = ax + (1 - a)Y. (a) For a = 0.4 (b) and r = corr(X,Y:s) = 0, compute mean(R:s) and volatility sd (R:s). corr(X,Y:s) = -0.8, compute mean (R: s) and "volatility" sd (R:s). compute mean(R:s) and volatility sd(R:s). (c) 0.4 and r = corr(X,Y:s) = +0.8, (d) corr(X,Y:s) = 0, compute mean(R:s) and "volatility" sd(R:s). and r = and r = (e) For a = 0.9 corr(X,Y:s) = 0.8, compute mean(R:s) and volatility sd(R:s). (f) For a = 0.9 and r = corr(X,Y:s) = +0.8, compute mean (R:s) and "volatility" sd(R:s). (g) Which of these portfolio scenarios (a)-(f), would you be most attracted to and why? x = For a = 0.4 For a = For a = 0.9 mean and r = Sy = sd(Y:s) = = 10.