Question: Stock A's expected return and standard deviation are E[RA] = 6% and 0A- 12%, while stock B's expected return and standard deviation are E[RB]

Stock A's expected return and standard deviation are E[RA] = 6% and 0A- 12%, while stock B's expected return and standard deviation are E[RB] - 10% and Og-20%. (a) How would you construct a portfolio with expected return of 8% using fund A and fund B? What is the standard deviation of the portfolio? (Assume Paz = 0.4) (b) How would you construct a portfolio with standard deviation of 15% using fund A and fund B? What is the expected return of the portfolio? (Assume Pas = 0.4)

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