Question: please do it asap 1. Business Equity Std Debt Equity Current Current Beta Deviation Firm Stock Value Price Kellogg 0.7 0.4 40% 60% $33 Ready-to-eat

 please do it asap 1. Business Equity Std Debt Equity Currentplease do it asap

1. Business Equity Std Debt Equity Current Current Beta Deviation Firm Stock Value Price Kellogg 0.7 0.4 40% 60% $33 Ready-to-eat cereals $14 billion Pepsi 1 0.5 $50 30% 70% $87 billion Food and beverage conglomerate 1.2 0.3 50% 50% $30 Albertson's Grocery stores $12 billion . . . Correlation between Kellogg and Pepsi 0.3 Correlation between Kellogg and Albertson's: 0.5 Correlation between Pepsi and Albertson's 0.6 Risk-free rate: 3% Expected return on the market. 12% Assume all debts in this question are risk-free The corporate tax rate is 34% for all firms in this question Given the above information, please answer the following questions . a) What would be the standard deviation of a portfolio with 50% of its money in Albertson's stock and 50% in Kellogg's stock? (20 marks) b For that portfolio described in part a) would replacing Kellogg with Pepsi increase or decrease the total risk of the portfolio? [No calculation needed just explain] (20 marks)

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