Question: 5. Stocks A, B, and C have the same expected return and standard deviation. The following table shows the correlations between the returns on these

5. Stocks A, B, and C have the same expected return and standard deviation. The following table shows the correlations between the returns on these stocks: (4 points) Stock A Stock B Stock C Stock A 1 Stock B 0.9 1 Stock C -0.5 -0.7 1 3 Given these correlations, the portfolio constructed from these stocks having the lowest risk is a portfolio: a. Equally invested in stocks A and B. b. Equally invested in stocks A and C. c. Equally invested in stocks B and C. d. Totally invested in stock C.

5. Stocks A, B, and have the same expected return and standard deviation. The following table shows the correlations between the returns on these stocks: (4 points) Stock B Stock C Stock A Stock B Stock C Stock A 1 0.9 -0.5 -0.7 1 2 Given these correlations, the portfolio constructed from these stocks having the lowest risk is a portfolio: a. Equally invested in stocks A and B. b. Equally invested in stocks A and C. c. Equally invested in stocks B and C. d. Totally invested in stock C

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