An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected return of 26% and a standard deviation of return of 34%. Stock B has an expected return of 20% and a standard deviation of return of 39%. The correlation coefficient between the returns on A and B is 0.56. How much should an investor put in stock B if he requires expected return of 23.35% on the risky portfolio?

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A: Hello. Since your question has multiple parts, we will solve first question for you. If you want…

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A: Option 2 is the correct answer.

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A:

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A: Honor Code: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must…