The realized returns for stock A and stock B from 20042009 are provided in the table below

Year	2004	2005	2006	2007	2008	2009
Stock A	9%	21%	6%	4%	3%	10%
Stock B	23%	9%	32%	1%	6%	27%

Suppose you create a portfolio that is 80% invested in stock A and 20% invested in stock B. The correlation between the returns of the two stocks is 6.27%.

(a) Calculate the expected return and volatility (as percents) of this portfolio. (Round your answer for volatility to two decimal places.)

expected return %

volatility %

(b) Calculate the relevant risk (as a percent) of each asset in this portfolio (the risk the investor cares about). The correlation between the returns of this portfolio and stock A,

Corr(R_A, R_P), is 94.09%. The correlation between the returns of this portfolio and stock B, Corr(R_B, R_P), is 39.71%. (Round your answers to two decimal places.)

stock A %

stock B %