ol want to create a portfolio consisting of the common stock of two U.S. companies: Kamchatka Defense Systems Inc. and Irkutsk 'R Us Corp. You have developed the following information: Problem Allocation Weight w Standard Expected Return E(r) Deviation a Stocks .60 20% 12% Kamchatka Defense Systems Inc. (KDS) Irkutsk 'R Us Corp. (IRU) .40 16% 10% Calculate the expected return of the portfolio and its standard deviation assuming a 0.4 correlation coefficient (PKDS IRU.) of the returns of the two stocks. (6 points) 1. Re-calculate the expected return of the portfolio and its standard deviation assuming a -0.8 correlation coefficient (pxos IRu.) of the returns of the two stocks. (6 points) 2. Take Compare the portfolio's expected return and standard deviation based on the -0.8 coefficient of correlation of the returns of the two stocks to their values that you calculated assuming a 0.4 correlation coefficient. Briefly explain how your results demonstrate the benefits of diversification. (6 points) 3