We assume a stock market where there are only two stocks: stock A and stock B. The following information regarding these two stocks:

Stock A:

Price: $10

Shares outstanding: 1000

Standard deviation: 20%

Stock B

Price: 20

Shares outstanding: 2000

Standard deviation: 25%

a) What are the weights of each stock in the market portfolio?

b) If the beta of stock A is 1.12, what is the beta of stock B?

c) If the standard deviation of the market portfolio is 16,4%, what is the correlation coefficient between the two stocks returns?