Question: Please write clearly or use the computer to type the answer so that I can see it clearly, thank you!!! Suppose you are building a

Please write clearly or use the computer to type the answer so that I can see it clearly, thank you!!!

Suppose you are building a two-asset portfolio with either stocks W and X or Stocks Y and Z.

Stock W

Stock X

Stock Y

Stock Z

Expected Return

20%

26%

18%

22%

Standard Deviation

10%

13%

14%

15%

Explain, with the aid of an equation, the conditions under which variances of stock returns

are unimportant in the determination of the risk of a portfolio.

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