Question 1. Portfolio Analysis (2 points) a) Assume the following about assets A and B: E[64] = 0.1, 02 = 0.09. E[ro] = 0.08, 0% = 0.04. Which one has lower absolute risk and which one has lower relative risk? (1) (2): b) Find the mean return, E[ro], and variance. 07. of a portfolio consisting of 70% of your total wealth invested in asset A (Wa=0.70), and 30% of your total wealth invested in asset B (wr= 0.30). The correlation between assets A and B (PR)= 0.25 (1): (2): c) Now assume that the correlation is -0.5. Use the information above to calculate the variance of this new portfolio. Explain how the riskiness of the portfolio changes