Suppose that the standard deviation of returns from a typical share is about .54 (or 54%) a year. The correlation between the returns of each pair of shares is about .8.

a. Calculate the variance and standard deviation of the returns on a portfolio that has equal investments in 2 shares, 3 shares, and so on, up to 10 shares. (Use decimal values, not percents, in your calculations. Do not round intermediate calculations. Round the "Variance" answers to 6 decimal places. Enter the"Standard Deviation" answers as a percent rounded to 3 decimal places.)

b. How large is the underlying market variance that cannot be diversified away? (Do not round intermediate calculations. Round your answer to 3 decimal places.)

c. Now assume that the correlation between each pair of stocks is zero. Calculate the variance and standard deviation of the returns on a portfolio that has equal investments in 2 shares, 3 shares, and so on, up to 10 shares. (Do not round intermediate calculations. Round the "Variance" answers to 6 decimal places. Enter the "Standard Deviation" answers as a percent rounded to 3 decimal places.)  

Please list answer for steps and formulas for each section of the problem.