Student instructions. This worksheet is for problem 7.6. Information necessary to solve the problem is listed below in column B. Enter formulas in the blanks where indicated to complete the calculations needed for the standard deviation and coefficient of variation of the new combined portfolio containing the added asset B Note the difference between the standard deviation and coefficient of variation of the existing portfolio A, without Asset B, and the standard deviation and coefficient of variation of the new combined portfolio with Asset B PROBLEM 7-6 Effect on Risk of Adding a New Asset to a Portfolio Given: Expected Return of existing portfolio A 9005 Standard deviation of existing portfolio A 3.00% Expected Return of new asset 12.00% Standard deviation of new asset 4.00% Amount invested in Portfolio A $700,000 Amount to be invested in Asset B $200,000 Correlation coefficient between existing portfolio A and new asset 0 Preliminary calculations: Coefficient of variation of existing portfolio A Coefficient of variation of new asset 8 Total value of new combined portfolio Weight of existing assets in combined portfolio Weight of new asset B in combined portfolio Expected Return of combined portfolio per equation 71 a Comparison of standard deviations of existing and new combined portfolios Standard deviation of new combined portfolio per equation 7-5 Standard deviation of existing portfolio A (given) 300 b Comparison of coefficients of variation of existing and new combined portfolios: Coefficient of Variation of new combined portfoto Coefficient of Variation of existing portfolio A 0.00%