Question: 2. (10 points) There are two stocks, A and B with historical returns given in the table below. Assume you create a portfolio that is

2. (10 points) There are two stocks, A and B with historical returns given in the table below. Assume you create a portfolio that is 60% stock A and 40% stock B. What is the correlation between stock A and stock B? What is the expected return of stock A, stock B, and the 60/40 portfolio? What are the variance and standard deviation of returns of stock A, stock B, and the 60/40 portfolio? A B 7% 12% 2 4% 13 1-2% 18% 6% 12% 6% 10% 4 07 1%

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