Question: A hedge fund has created a portfolio using just two stocks. It has shorted $35,000,000 worth of Oracle stock and has purchased $85,000,000 of Intel

A hedge fund has created a portfolio using just two stocks.

A hedge fund has created a portfolio using just two stocks. It has shorted $35,000,000 worth of Oracle stock and has purchased $85,000,000 of Intel stock. The correlation between Oracle's and Intel's returns is 0.65. The expected returns and standard deviations of the two stocks are given in the table below: Expected Return Standard Deviation Oracle 12.00% 45.00% Intel 14.50% 40.00% a. What is the expected return of the hedge fund's portfolio? b. What is the standard deviation of the hedge fund's portfolio

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