You are a portfolio manager who manages a portfolio consisting of two stocks, Stock A and Stock B. The portfolio is currently worth $1,000,000 and is invested in equal amounts in the two stocks. The expected returns and standard deviations of the two stocks are as follows:

• Stock A: Expected return = 10%, Standard deviation = 15%
• Stock B: Expected return = 15%, Standard deviation = 20%

Assume that the returns of the two stocks are not perfectly correlated (i.e., there is some diversification benefit). What is the expected return and standard deviation of the portfolio?

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