Question $2[10$ points$]$: The following are estimates for two stocks:

The market index has a standard deviation of $22\%$ and the risk$-$free rate is $8\%.$

a$.$ What are the standard deviations of stocks A and B$?$ Which stock is overall more risky?

b$.$ Which stock has higher firm specific risk? Why?

c$.$ Which stock has greater systematic risk? Why?

d$.$ What are the correlation coefficients of stocks A and B with the market?Suppose that we were to construct a portfolio with proportions:

e$.$ Compute the expected return, standard deviation, beta, and nonsystematic standard deviation of the portfolio.