Suppose Biovail and Shoppers Drug Mart have the expected returns and volatilitiese show below: E(R) Biovail Shoppers Drug Mart 16% 7% 20% 10% The correlation of returns between Biovail and Shoppers is 0.22. (a) Calculate the expected return and standard deviation of a portfolio that is equally invested in Biovail's and Shoppers Drug Mart's stock (b) Calculate the Minimum Variance portfolio of a portfolio containing Biovail and Shoppers' stocks. Draw the Markowitz Efficient Frontier showing the risk-return trade-off. Your diagram should indicate the minimum variance portfolio, the 50:50 portfolio, and the 100% Biovail and 100% Shoppers portfolios. (c) Note: You are not required to do any calculations for this part (c) of the question: If the correlation between Biovail and Shoppers' stocks were to increase: (explain briefly) i. Would the expected return of the portfolio rise or fall? Would the volatility (i.e. standard deviation) of the portfolio rise or fall? ii. (d) Calculate the expected return and standard deviation of a portfolio that consists of a long position of $10,000 in Biovail and a short position of $2,000 in Shoppers Drug Mart Suppose Biovail and Shoppers Drug Mart have the expected returns and volatilitiese show below: E(R) Biovail Shoppers Drug Mart 16% 7% 20% 10% The correlation of returns between Biovail and Shoppers is 0.22. (a) Calculate the expected return and standard deviation of a portfolio that is equally invested in Biovail's and Shoppers Drug Mart's stock (b) Calculate the Minimum Variance portfolio of a portfolio containing Biovail and Shoppers' stocks. Draw the Markowitz Efficient Frontier showing the risk-return trade-off. Your diagram should indicate the minimum variance portfolio, the 50:50 portfolio, and the 100% Biovail and 100% Shoppers portfolios. (c) Note: You are not required to do any calculations for this part (c) of the question: If the correlation between Biovail and Shoppers' stocks were to increase: (explain briefly) i. Would the expected return of the portfolio rise or fall? Would the volatility (i.e. standard deviation) of the portfolio rise or fall? ii. (d) Calculate the expected return and standard deviation of a portfolio that consists of a long position of $10,000 in Biovail and a short position of $2,000 in Shoppers Drug Mart