Question: Consider Securities A and B with the following estimates: -expected return of A is 4% - expected return of B is 13.5% -variance of A

Consider Securities A and B with the following estimates:

-expected return of A is 4% -

expected return of B is 13.5%

-variance of A is 144%

-variance of B is 324%

If the portfolio is comprise of 43% A and 57% B and if the correlation between returns on A and B is -0.28, what is the portfolios expected return and risk?

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The Final answer is 10,114

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