Problem 12-8 Stocks A and B have the returms given in the table below a. What are the expected returnms of the two stocks? b. What are the standard deviations of the retums of the two stocks? c. If their correlation is 0.46, what is the expected return and standard deviation of a portfolio of 70% stock A and 30% stock B? Stock A S 1000 7% 15% -500 890 Year Stock B 690 200 500 196 20% 14 a. What are the expected returnms of the two stocks? 17 Stock A Stock B 19 Average retum b. What are the standard deviations of the returns of the two stocks? Stock A Stock B 24 Standard deviation c. If their correlation is 0.46, what is the expected return and standard deviation of a portfolio of 70% stock A and 30% stock B? 27 Correlation Stock A holding Stock B holding 0.46 70% 30% 31 Expected returm Standard deviation