Given: E(R1) = 0:10 E(R2) = 0:15 E(1) = 0:03 E(2) = 0:05 Calculate the expected returns and expected standard deviations of a two-stock portfolio

Given:

E(R1) = 0:10

E(R2) = 0:15

E(σ1) = 0:03

E(σ2) = 0:05

Calculate the expected returns and expected standard deviations of a two-stock portfolio in which Stock 1 has a weight of 60 percent under the following conditions.

a. r1,2 = 1.00

b. r1,2 = 0.75

c. r1,2 = 0.25

d. r1,2 = 0.00

e. r1,2 = −0.25

f. r1,2 = −0.75

g. r1,2 = −1.00