Question: Given two stocks with E(r1) = 10%, E(r2) = 12%, 0'1 = 18%1 02 = 22%. Calculate the expected returns and standard deviations of a

Given two stocks with E(r1) = 10%, E(r2) = 12%, 0'1 = 18%1 02 = 22%. Calculate the expected returns and standard deviations of a two-stock portfolio under each of the following conditions: (a) 21:1 = 0.801 w; = 0.20, p = 0.6; (b) an = 0.60, mg = 0.40, p = 0; (c) an = 0.201 W2 = 0.80, p = 0.6. Here 11).; is the weight of stock 2' in the portfolio1 p is the correlation between the two stock returns

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