Given:

E(R₁) = 0.12

E(R₂) = 0.16

E(₁) = 0.02

E(₂) = 0.06

Calculate the expected returns and expected standard deviations of a two-stock portfolio in which Stock 1 has a weight of 60 percent under the conditions given below. Do not round intermediate calculations. Round your answers for the expected returns of a two-stock portfolio to three decimal places and answers for expected standard deviations of a two-stock portfolio to four decimal places.

A). r_1,2 = 1.00

Expected return of a two-stock portfolio: _______

Expected standard deviation of a two-stock portfolio:______

B). r_1,2 = 0.80

Expected return of a two-stock portfolio:________

Expected standard deviation of a two-stock portfolio:________

C). r_1,2 = 0.15

Expected return of a two-stock portfolio: _______

Expected standard deviation of a two-stock portfolio:________

D). r_1,2 = 0.00

Expected return of a two-stock portfolio:_______

Expected standard deviation of a two-stock portfolio:________

E). r_1,2 = -0.15

Expected return of a two-stock portfolio: _________

Expected standard deviation of a two-stock portfolio:_________

F). r_1,2 = -0.80

Expected return of a two-stock portfolio: _______

Expected standard deviation of a two-stock portfolio: ________

G). r_1,2 = -1.00

Expected return of a two-stock portfolio:_________

Expected standard deviation of a two-stock portfolio:__________