You have a client investing in two risky assets classes, Stocks and Bonds, and also in T-bills (the risk-free asset class). The client's risky portfolio is invested 26% in Stocks and 74% Bonds. The client's overall or complete portfolio is invested 55% in the risky portfolio and 45% in T-bills. Expected returns, standard deviations, and correlations are shown in the table below. What is the standard deviation of the portfolio of two risky assets? Show your work Expected Return Standard Deviation Correlation with Stocks Stocks 15% 50% Bonds 10% 20% -0.20 T-bills 6% 0% lo Your Answer: (.26)(.50)= .13 (.74).20) = .148 +.13 = .278 stdev of risky asset portfolio = 27.8%