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The following are estimates for two stocks. Stock Expected Return Beta Firm-Specific Standard Deviation 14% 19% 0.90 1.25 40% 30% The market index has a

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The following are estimates for two stocks. Stock Expected Return Beta Firm-Specific Standard Deviation 14% 19% 0.90 1.25 40% 30% The market index has a standard deviation of 22% and the risk-free rate is 8%. 1. What are the standard deviations of stocks A and B? 2, Compute the standard deviation of a portfolio that has 50% weight in both A and B

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