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1. Explain the relationship between risk and required return. 2. How do you define the correlation of+0.30, 0, and 0.70 between two stocks? 3. Why does the portfolio risk go down when you include more financial assets in a portfolio? Why does it happen? Show with the help of a graph The covariance between XYZ stock and the S&P 500 is 0.06. The standard deviation of the stock market is 18% What is the beta of XYZ? Assume that you have invested in two stock A and B. Stock A has a standard deviation of return of 10 percent. Stock B has a standard deviation of return of 20 percent. The correlation coefficient between the two stocks is 0.45. If you invest 70 percent of your funds in stock A and 30 percent in stock B, what is the standard deviation of your portfolio? 1. Explain the relationship between risk and required return. 2. How do you define the correlation of+0.30, 0, and 0.70 between two stocks? 3. Why does the portfolio risk go down when you include more financial assets in a portfolio? Why does it happen? Show with the help of a graph The covariance between XYZ stock and the S&P 500 is 0.06. The standard deviation of the stock market is 18% What is the beta of XYZ? Assume that you have invested in two stock A and B. Stock A has a standard deviation of return of 10 percent. Stock B has a standard deviation of return of 20 percent. The correlation coefficient between the two stocks is 0.45. If you invest 70 percent of your funds in stock A and 30 percent in stock B, what is the standard deviation of your portfolio