On the long flight back from south korea, aaron had plenty of time to reflect upon the challenges of his business trip that took him to four asian countries. his goal to sell his company's state-of-the-art bicycle pump to several foreign firms certainly could have gone better. although the 10 companies he visited didn't turn him down, only one agreed to place an order. representatives from one indonesian firm and two chinese firms asked him when he planned to come again! as aaron reviewed his memories and notes, he pondered, "didn't they realize the expense of these international trips? " aaron is experiencing:

Stocks a, b, and c are similar in some respects: each has an expected return of 10% and a standard deviation of 25%. stocks a and b have returns that are independent of one another; i.e., their correlation coefficient, r, equals zero. stocks a and c have returns that are negatively correlated with one another; i.e., r is less than 0. portfolio ab is a portfolio with half of its money invested in stock a and half in stock b. portfolio ac is a portfolio with half of its money invested in stock a and half invested in stock c. which of the following statements is correct? a. portfolio ab has a standard deviation that is greater than 25%.b. portfolio ac has an expected return that is less than 10%.c. portfolio ac has a standard deviation that is less than 25%.d. portfolio ab has a standard deviation that is equal to 25%.e. portfolio ac has an expected return that is greater than 25%.