Matt Peters wishes to evaluate the risk and return behaviors associated with various combinations of assets V and W under three assumed degrees of correlation: perfect positive, uncorrelated, and perfect negative. The expected returns and standard deviations calculated for each of the assets are shown in the following table.

a. If the returns of assets V and W are perfectly positively correlated (correlation coefficient = +1), describe the range of
(1) Expected return and
(2) Risk associated with all possible portfolio combinations.
b. If the returns of assets V and W are uncorrelated (correlation coefficient = 0), describe the approximate range of
(1) Expected return and
(2) Risk associated with all possible portfolio combinations.
c. If the returns of assets V and W are perfectly negatively correlated (correlation coefficient = -1), describe the range of
(1) Expected return and
(2) Risk associated with all possible portfoliocombinations.

Expected Risk (standard Assct rcturn, deviation), a, 8% 13 5% 10