(Computing the standard deviation for a portfolio of two risky investments) Mary Guilott recently graduated from Nichols State University and is anxious to begin investing her meager savings as a way of applying what she has learned in business school. Specifically, she is evaluating an investment in a portfolio comprised of two firms' common stock. She has collected the following information about the common stock of Firm A and Firm B: ##. a. If Mary invests half her money in each of the two common stocks, what is the portfolio's expected rate of return and standard deviation in portfolio return? b. Answer part a where the correlation between the two common stock investments is equal to zero. c. Answer part a where the correlation between the two common stock investments is equal to +1. d. Answer part a where the correlation between the two common stock investments is equal to -1. e. Using your responses to questions a-d, describe the relationship between the correlation and the risk and return of the portfolio. C a. If Mary decides to invest 50% of her money in Firm A's common stock and 50% in Firm B's common stock and the correlation between the two stocks is 0.50, then the expected rate of return in the portfolio is %. (Round to two decimal places.) The standard deviation in the portfolio is %. (Round to two decimal places.) b. If Mary decides to invest 50% of her money in Firm A's common stock and 50% in Firm B's common stock and the correlation between the two stocks is zero, then the expected rate of return in the portfolio is %. (Round to two decimal places.) The standard deviation in the portfolio is %. (Round to two decimal places.) c. If Mary decides to invest 50% of her money in Firm A's common stock and 50% in Firm B's common stock and the correlation coefficient between the two stocks is +1, then the expected rate of return in the portfolio is %. (Round to two decimal places.) The standard deviation in the portfolio is %. (Round to two decimal places.) d. If Mary decides to invest 50% of her money in Firm A's common stock and 50% in Firm B's common stock and the correlation coefficient between the two stocks is -1, then the expected rate of return in the portfolio is %. (Round to two decimal places.) The standard deviation in the portfolio is %. (Round to two decimal places.) e. Using your responses to questions a-d, which of the following statements best describes the relationship between the correlation and the risk and return of the portfolio? ( A. The correlation coefficient has no effect on the expected return of a portfolio, but the closer the correlation coefficient is to negative one, -1, the higher the risk. B. The correlation coefficient has no effect on the expected return of a portfolio, but the closer the correlation coefficient is to one, the lower the risk. OC. The correlation coefficient has no effect on the expected return of a portfolio, but the closer the correlation coefficient is to negative one, -1, the lower the risk. OD. The correlation coefficient has a negative effect on the expected return of a portfolio, and the closer the correlation coefficient is to negative one, -1, the lower the risk. Data table Expected Return Standard Deviation Firm A's common stock 0.17 0.16 Firm B's common stock 0.16 0.25 Correlation coefficient 0.50