Question: 5. A hedge fund manager will form a portfolio consisting of an investment in Coke stock and in the S&P 500 index (which broadly replicates

5. A hedge fund manager will form a portfolio consisting of an investment in Coke stock and in the S&P 500 index (which broadly replicates the performance of the overall stock market). Coke stock has a required return of 10% (as determined by the CAPM). Coke's return has a standard deviation of 12%. The S&P 500 index has an expected return of 12% with a standard deviation of 13%. The risk-free rate is 3%. Coke's stock price is $62 and its payout ratio is 30%.. What is the standard deviation of a portfolio consisting of 75% invested in Coke stock and 25% invested in the S&P 500 index

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