Given:

E(R₁) = 0.12

E(R₂) = 0.19

E(₁) = 0.01

E(₂) = 0.03

Calculate the expected returns and expected standard deviations of a two-stock portfolio in which Stock 1 has a weight of 50 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 = 0.60

Expected return of a two-stock portfolio: ________

Expected standard deviation of a two-stock portfolio:________

C). r_1,2 = 0.20

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 = -0.20

Expected return of a two-stock portfolio: _________

Expected standard deviation of a two-stock portfolio:_______

F). r_1,2 = -0.60

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: _________