# Expected return and standard deviation for a portfolio

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4.

Asset 1 Asset 2

E(R1) = .12 E(R2) = .16

E(s1) = .04 E(s2) = .06

a. Calculate the expected return and expected standard deviation of a two stock portfolio when r1,2 = - .60 and w1 = .75.

b. Calculate the expected returns and expected standard deviations of a two stock portfolio when r1,2 = .80 and w1 = .60.

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The expert calculates the expected return and standard deviation for a two stock portfolio.

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Asset 1 Asset 2

E(R1) = .12 E(R2) = .16

E(s1) = .04 E(s2) = .06

a. Calculate the expected return and expected standard deviation of a two stock portfolio when r1,2 = - .60 and w1 = .75.

Stock Portfolio Share (w) Expected return ( r ) Standard deviation (s) Correlation (rho)

A (Asset 1) 0.75 0.12 0.04 -0.6

B ...

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