Last year, Cisco’s stock had a return of 67.1% with a standard deviation of 33.5% while Dell had a return of 28.2% and a standard deviation of 29.43%. The correlation between the two stocks was 0.628 last year.

a. If your portfolio last year had consisted of 50% invested in Cisco and the other50% invested in Dell, what would have been the return on your portfolio and its standard deviation?

b.During the year, the market earned 34.0% and had a standard deviation of only16.0%. What combination of Cisco and Dell would have earned that same return as the market? What would have been the standard deviation of that portfolio?

c.The correlation of Cisco with the market was 0.706 and the correlation of Dell with the market was 0.628. What combination of the market and Cisco would have had the same standard deviation as Dell’s stock? What would have been the return on that portfolio?