**PLEASE COMPLETE IN EXCEL & SHOW FORMULA'S**

The correlation between the returns of three stocks A, B, C are given in the following tables: A Stock A B B A 1.00 1 2 3 4 B 0.80 1.00 D 0.10 0.15 1.00 The expected rates of returns on A, B, and C are 16%, 12%, and 15% respectively. The corresponding standard deviations of the returns are 25%, 22%, and 25%. a. What is the standard deviation of a portfolio invested 25% in stock A, 25% in stock B, and 50% in Stock C? (17.80%) b. You plan to invest 50% of your money in the portfolio constructed the part a and 50% in the risk-free assets. The risk-free interest rate is 5%. What is the expected return on this investment? What is the standard deviation of the returns on this investment? (9.75%, 8.9%)