Question: The expected return on Big Time Toys is 9% and its standard deviation is 21%. The expected return on Chemical Industries is 13% and its

The expected return on Big Time Toys is 9% and its standard deviation is 21%. The expected return on Chemical Industries is 13% and its standard deviation is 26.5%.

a. Suppose the correlation coefficient for the two stocks' returns is 0.25. What are the expected return and standard deviation of a portfolio with 44% invested in Big Time Toys and the rest in Chemical Industries? (Round your answers to 2 decimal places.)

Portfolio's expected return % ?

Portfolio's standard deviation % ?

b. If the correlation coefficient is 0.75, recalculate the portfolio expected return and standard deviation, assuming the portfolio weights are unchanged. (Round your answers to 2 decimal places.)

Portfolio's expected return % ?

Portfolio's standard deviation % ?

c. Why is there a slight difference between the results, when the correlation coefficient was 0.25 and when it was 0.75?

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