The expected return on General Steel is 9 and its standard deviation is 20 The expected return on Chemical Industries 8 and its standard deviation is 25 A)Suppose the correlation coefficient for the two stocks' returns is 0 2 What are the expected return and standard deviation of a portfolio with 40 of your portfolio is in General Steel and the remainder is in Chemical Industries B)If the correlation coefficient is 0 7, recalculate the expected return and standard deviation, assuming the portfolio weights are unchanged C)Explain the difference between your answers to (a) and (b)

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Question: The expected return on General Steel is 9% and its standard deviation is 20%. The expected return on Chemical Industries 8% and its standard deviation

The expected return on General Steel is 9% and its standard deviation is 20%. The expected return on Chemical Industries 8% and its standard deviation is 25%.

A)Suppose the correlation coefficient for the two stocks' returns is 0.2. What are the expected return and standard deviation of a portfolio with 40% of your portfolio is in General Steel and the remainder is in Chemical Industries?
B)If the correlation coefficient is 0.7, recalculate the expected return and standard deviation, assuming the portfolio weights are unchanged.
C)Explain the difference between your answers to (a) and (b).

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