Stock A has a standard deviation of 7%. Stock B has a standard deviation of 12%. The correlation coefficient between the two stocks' returns is 0.4071. What is the risk (standard deviation) for an equally weighted portfolio of stocks A and B?

a. 7.639%
b. 45.65%
c. 2.854%
d. 9.54%
e. 8.08%

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EXHIBIT 7.13. Process Flowchart for the University of Audubon Rare Book Library 40 People per Hour Visitor Wait Area Front Office [High Customer Contact) Head Librarian Register and Verify Reference Wait Area Special Librarian Check-In FE Walt Area OM Walt Area Wait Area Back Office (Low Customer Contact] First- Edition Retrieval Original Manuscript Retrieval Author Journal Retrieval Line of Customer Visibility EXHIBIT 7.13. Process Flowchart for the University of Audubon Rare Book Library 40 People per Hour Visitor Wait Area Front Office [High Customer Contact) Head Librarian Register and Verify Reference Wait Area Special Librarian Check-In FE Walt Area OM Walt Area Wait Area Back Office (Low Customer Contact] First- Edition Retrieval Original Manuscript Retrieval Author Journal Retrieval Line of Customer Visibility