Q-1. An investor wants to form a portfolio of two stocks with the following characteristics. Stocks Return = E(R) Standard deviation EO Weight (W) E(R1) = 12% E(61) = 14.0% W1 = 30% 2 E(R2) = 15% E(62) = 18.0% W2 = 70% (i). Calculate the Coefficient of Variation (CV) of the two stocks. Which stock will be preferred if the investor decides to choose only one of the two stocks? Justify your answer. (ii). Calculate the average rate of return and standard deviation of the above portfolio if correlation coefficient between the stocks is (a). 11,2 = 0.80 and (b). 11,2 = 0.20 (C). 11,2 = 0.00 (d). 11,2=-0.20 and (b). 11,2=-0.50. What is happening to the standard deviation of the portfolio with changing correlation? Explain in your own words. (Marks 7)