Suppose that the universe of available risky securities consists of a large number of stocks. Each stock has expected return E[R] = 15% and standard deviation of the return = 0.5. Based on historical data, you find that a portfolio consisting of 50 stocks has a variance the return equal to 0.0625. Suppose the correlation coefficient is the same for any two stocks.

1. Calculate the correlation coefficient.

2. Calculate the systematic risk in terms of variance.