vork 8 (Ch. 11) wevest investme Financial Advisors suggests an invest ment in two stocks 40% in Stock A and 60% in Stock They claim the nt will reduce risk through diversification, but they need proof. This is the historical returns for the two stocks. Returns (% Year Stock A Stock 8 15.37% 2013 16.38 14.68 12.17 10.51 10.88 12.96% 2012 warded2014 2015 7.79 10.31 6.01 red 2016 ook a. Using a 40/60 split, what is the weighted average standard deviation of the two stocks? (Enter your answer as a percent rounded to two decimal places.) int ed average standard deviation 533 196 b. Recalculate the standard deviation of a portfolio of the two stocks. (Enter your answer as a percent rounded to two decimal places.) Portfolio standard deviation 7.13 C 196 a. Using a 40/60 split, what is the weighted average standard deviation of the two stocks? (Enter your answer as a percent rounded to two decimal places.) 5.33 39% Weighted average standard deviation Recalculate the standard deviation of a portfolio of the two stocks. (Enter your answer as a percent rounded to two decimal places.) Portfolio standard deviation 7.130% c. What is the reduction in standard deviation that results from the creation of a portfolio of the two stocks? (Enter your answer as a percent rounded to two decimal places.) Reduction in standard deviation