Here are returns and standard deviations for four investments.

Calculate the standard deviations of the following portfolios.
a. 50% in Treasury bills, 50% in stock P.
b. 50% each in Q and R, assuming the shares have
Perfect positive correlation
Perfect negative correlation
No correlation
c. Plot a figure like Figure for Q and R, assuming a correlation coefficient of .5.
d. Stock Q has a lower return than R but a higher standard deviation. Does that mean that Q’s price is too high or that R’s price is toolow?

10 Boeing 40% in Boeing Campbell soup 100 15 20 0 Standard deviation (o) %