Question: Consider a portfolio containing two stocks with equal weights (wA=wB=50%). Stock A's expected return is 20% with a standard deviation of 30%; stock B's expected

Consider a portfolio containing two stocks with equal weights (wA=wB=50%). Stock

Consider a portfolio containing two stocks with equal weights (wA=wB=50%). Stock A's expected return is 20% with a standard deviation of 30%; stock B's expected return is 15% with a standard deviation of 25%. The correlation between the two stocks is 0.5. How much would the portfolio standard deviation be reduced if the correlation dropped from 0.5 to 0 ? 4.3%19.5%23.8%13.9%

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