Given:

	E(R1) = 0.13
	E(R2) = 0.18
	E(1) = 0.04
	E(2) = 0.06

Calculate the expected returns and expected standard deviations of a two-stock portfolio having a correlation coefficient of 0.75 under the conditions given below. Do not round intermediate calculations. Round your answers to four decimal places.

1. w₁ = 1.00

   Expected return of a two-stock portfolio:

   Expected standard deviation of a two-stock portfolio:

2. w₁ = 0.65

   Expected return of a two-stock portfolio:

   Expected standard deviation of a two-stock portfolio:

3. w₁ = 0.50

   Expected return of a two-stock portfolio:

   Expected standard deviation of a two-stock portfolio:

4. w₁ = 0.30

   Expected return of a two-stock portfolio:

   Expected standard deviation of a two-stock portfolio:

5. w₁ = 0.05

   Expected return of a two-stock portfolio:

   Expected standard deviation of a two-stock portfolio:

Choose the correct riskreturn graph for weights from parts (a) through (e) when r_i,j = -0.75; 0.00; 0.75.

The correct graph is -Select-graph Agraph Bgraph Cgraph DItem 11 .

A.
B.
C.
D.