26. A person is interested in constructing a portfolio. Two stocks are being considered. Let x percent return for an investment in stock 1, and y percent return for an investment in stock 2. The expected return and variance for stock 1 are e(x) = 8.45% and Var(x) = 25. The expected return and variance for stock 2 are e(y) 3.20% and Var(y) 1. The covariance between the returns is s,, -3. a. what is the standard deviation for an investment in stock 1 and for an investment in stock 2? Using the standard deviation as a measure of risk, which of these stocks is the riskier investment? b. what is the expected return and standard deviation, in dollars, for a person who invests $500 in stock 1? c. what is the expected percent return and standard deviation for a person who constructs a portfolio by investing 50% in each stock? d. what is the expected percent return and standard deviation for a person who constructs a portfolio by investing 70% in stock 1 and 30% in stock 2? e. Compute the correlation coefficient for x and y and comment on the relationship between the returns for the two stocks