Question: Given: E(R1) = 0.10 E(R2) = 0.15 1 = 0.03 2 = 0.05 Calculate the expected returns and standard deviations of a two-stock portfolio in

Given:

E(R1) = 0.10

E(R2) = 0.15

1 = 0.03

2 = 0.05

Calculate the expected returns and standard deviations of a two-stock portfolio in which Stock 1 has a weight of 60 percent under each of the following conditions:

a. r1,2 = 1.00

b. r1,2 = 0.75

c. r1,2 = 0.25

d. r1,2 = 0.00

e. r1,2 = -0.25

f. r1,2 = -0.75

g. r1,2 = -1.00

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