1. Suppose the correlation coefficient between Y and Z is .2. If you took 50% of your portfolio and invested it in the portfolio you formed in a above and 50% of your portfolio and invested it in the portfolio you formed in b above, what would be the expected return and expected standard deviation of the new portfolio?

a)Expected Return=12.5%

Standard Deviation=5.2915%

b)Expected Return=15%

Standard Deviation:5.445%

1. Suppose that you are given the following information about an asset: Expected Return Asset x 1 Expected Standard Deviation .04 .08 .15 .2 .09