You estimated the single index (market) model for stocks P and Q with the following results: Return on Stock P: Rp = 0.04 +0.6RM + еp Return on Stock Q: RQ = 0.04 + 1.4RM + еQ Where RM is return on the single index and ep and eq are error terms which are not correlated with anything and have zero means. In addition, the following statistics are known for RM and the error terms: Mean Risk-free rate 3% Single index return, RM 8% Error term for Stock P return, ep 0% Error term for Stock Q return, eq 0% Standard Deviation 15% 20% 10% Based on the information above, calculate the smallest possible portfolio return standard deviation one can get by forming a two-asset portfolio of Stock P and Q. Hint: Recall the formula for the weight of the minimum variance portfolio. b. Suppose you intend to hold a combined portfolio by allocating 50% in the risk-free asset and the remaining in the minimum variance portfolio (i.e., the risky portfolio you constructed in part a). What is the expected return of your combined portfolio? please don't skip and give answer