Consider two stocks, C and D$.$ You have the following information:

$-$ Stock C has an expected return of $12\%$ and a standard deviation of $25\%.$

$-$ Stock D has an expected return of $10\%$ and a standard deviation of $15\%.$

$-$ The correlation coefficient between their returns is $0\mathrm{.}5.$

You are considering a portfolio consisting of $40\%$ invested in C and $60\%$ invested in D$.$

a$.$ Calculate the expected return of the portfolio.

b$.$ Calculate the variance and standard deviation of the portfolio$$s return.

c$.$ Suppose you want to achieve a target expected return of $11\%.$ Determine the portfolio

weights in C and D that would yield this target return.

d$.$ Given the correlation and other data, explain qualitatively how an increase in the correlation

to $0\mathrm{.}9$ would affect the portfolio$$s standard deviation $($no calculation needed, just a

conceptual explanation$)$