CHAPTER 8, ACTIVITY #1: TWO -ASSET RETURN AND RISK In this activity, we calculate the expected return and standard deviation of a two-asset portfolio. We also build a two-way date table to show the relationship between weights and correlation. We start with information on our two stocks: STOCK: EXPECTED RETURN STANDARD DEVIATION Alpha 20% Bravo 12% Open the upload for this activity, and perform the following steps: STEP1 : In cell B8, enter 0% for the weight in Alpha. In cell B9, enter the formula, =1-88. Now, our weights will always add to 100%. STEP2 : In cell B12, enter the formula for portfolio return. Make sure you use cell references for the equation. STEP 3: In cell B13, enter the formula for portfolio variance. Make sure you use cell references for the equation. Now, we have portfolio return and variance as a function of the weight and correlation. STEP 4: In cell B14, take the square root of cell B13. STEP 4: Now, refer to the standard deviation value (cell B14) in cell 15. Create a two way data table with the correlation value (cell 85) as the row input, and the weight in Alpha (cell B8) as the column input. You now have a date table with standard deviation as a function of weight and correlation. What do the results show you