Question 1

The following table shows risk and return measures for Coca-Cola and Intel.

Stock	Expected Return	Volatility
Coca-Cola	13.6%	15.4%
Intel	15%	23%

The correlation coefficient between the returns of Coca-Cola and Intel is 0.27. What is the volatility of the minimum-variance portfolio consisting of Coca-Cola and Intel? Assume there are no short-sale restrictions.

	a.	8.15%
	b.	15.4%
	c.	-8.15%
	d.	14.23%
	e.	0