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As an investor you are evaluating the following two assets
  Asset 1 asset 2
Expected return [E(Ri)] 0.08 0.1
Expected standard deviation [E(Si)] 0.04 0.06
Weight (Wi) 0.75 0.25
     
Coefficient of correlation (r1,2) -0.2  
     
For the two stock portfolio, calculate  
expected return    
standard deviation    
  1.

Expected return is 8.5% and standard deviation is .05

    2.

Expected return is .085 and standard deviation is .03

    3.

Expected return is 8.5% and standard deviation is .02

    4.

Expected return is 9.2% and standard deviation is .4975



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The Expected Return and Standard Deviation is calculated below - A B C D 1 2 Expected Return of Portfolio 3 = Expected Return of Stock Asset 1 * Weigh
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