Answer the below independent questions.

a$.$ You are thinking about investing in two assets and you find out they are perfectly

correlated. The respective standard deviations are $10\%$ and $15\%.$ What is the

standard deviation of this portfolio if you invest the same amount of money in

each fund?

b$.$ What is your portfolio beta if you invest $75\%$ of your money in a stock mutual fund

$($that has the same beta as a market portfolio$)$ and the rest in a risk$-$free asset?

c$.$ What would be your portfolio beta with $25\%$ in the market portfolio, $25\%$ in an

asset with twice as much risk as the market portfolio, and the rest in a risk$-$free

asset?

d$.$ Assume a portfolio with four assets: Asset A$,$ Asset B$,$ Asset C$,$ and Asset D$.$ Asset

$A$ is the market portfolio. Asset $B$ has half the risk of Asset $A.$ Asset $C$ has twice the

risk of Asset A$.$ Asset D is risk$-$free. What is the portfolio beta if each asset is equal$-$

weighted?

e$.$ Explain the importance of portfolio construction as applied to investment in

financial assets.