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Problem $6-04$

You are considering two assets with the following characteristics.

E$($R$1)=0\mathrm{.}18$ E$(\backslash$sigma $1)=0\mathrm{.}13$ w$1=0\mathrm{.}5$

E$($R$2)=0\mathrm{.}26$ E$(\backslash$sigma $2)=0\mathrm{.}19$ w$2=0\mathrm{.}5$

Compute the mean and standard deviation of two portfolios if r$1,2=0\mathrm{.}35$ and $-0\mathrm{.}65,$ respectively. Do not round intermediate calculations. Round your answers for the mean of two portfolios to three decimal places and answers for standard deviations of two portfolios to five decimal places.

Mean of two portfolios:

$0\mathrm{.}220$

Standard deviation of two portfolios if r$1,2=0\mathrm{.}35$:

Standard deviation of two portfolios if r$1,2=-0\mathrm{.}65$:

Choose the correct risk$$return graph.