Question: Look back at the calculation for Coca-Cola and Reebok in Section 8.1. Recalculate the expected portfolio return and standard deviation for different values of x

Look back at the calculation for Coca-Cola and Reebok in Section 8.1. Recalculate the expected portfolio return and standard deviation for different values of x₁ and x₂, assuming the correlation coefficient ?₁₂ = 0. Plot the range of possible combinations of expected return and standard deviation as in Figure 8.4. Repeat the problem for ?₁₂ = +1 and for ?₁₂ = ?1.

Expected return (r), percent 22 Reebok 20 18 16 14 35 percent

Expected return (r), percent 22 Reebok 20 18 16 14 35 percent in Reebok 12- 10 Coca-Cola 20 30 40 50 60 Standard deviation (a), percent

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