Refer to Problem 5.3. Assume that asset 1 represents 40% of the portfolio and asset 2 is

Question:

Refer to Problem 5.3. Assume that asset 1 represents 40% of the portfolio and asset 2 is 60%. Calculate the average return and standard deviation of this portfolio’s returns over the six-year period. Compare your answers with the answers from Problem 5.3.

Data From Problem 5.3

Assume you are considering a portfolio containing assets 1 and 2. Asset 1 will represent 55% of the dollar value of the portfolio, and asset 2 will account for the other 45%. The projected returns over the next six years, 2021–2026, for each of these assets are summarized in the following table.