You form a portfolio from a riskless asset and two stocks, A and B. Here is some information about these assets:

a) What is the standard deviation of a portfolio that invests 40% in Stock A, 40% in Stock B, and the rest, 20%, in the riskless asset?

b) Whats the portfolios Sharpe ratio?

Asset Expected Return 13% 20% 5% Standard Deviation 40% 60% Stock A Stock B Riskless Asset Correlation (A, B) -0.2