You have a portfolio P that consists of 50% Stock X and 50% Stock Y. Stock X has a beta of 0.7 and Stock Y has a beta of 1.3. The standard deviation of each stock's returns is 20%. The stocks' returns are independent of each other, i.e., the correlation coefficient, r, between them is zero. a.       What is the beta for this portfolio? b.       What is the standard deviation of this portfolio’s return? c.       Describe the significance of the correlation coefficient being

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Q: of

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A: Risk free rate = 7.9% Stock beta = 0.77 Market return = 11.5%

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