Question: a. State the basic assumptions behind Markowitz portfolio theory. (10 marks) b. Information for a portfolio of two assets is given below: Asset (A)

a. State the basic assumptions behind Markowitz portfolio theory. (10 marks) b.

a. State the basic assumptions behind Markowitz portfolio theory. (10 marks) b. Information for a portfolio of two assets is given below: Asset (A) E(Ra)=25% = 5% Asset (B) E(Rb)=11% Wa=0.25 = 7% Wb=0.75 COVAB 0.00012 i. Calculate the expected return for the portfolio -E(Rport) (4 marks) ii. Calculate the standard deviation for the portfolio. (4 marks)

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