Question: What is the expected return and standard deviation of a portfolio comprised of $4,000 in stock M and $6,000 in stock N and covariance of
What is the expected return and standard deviation of a portfolio comprised of $4,000 in stock M and $6,000 in stock N and covariance of M and N is 15%?

Is this right? Er = [(4000+(4000+6000)*.18] + [6000+(4000+6000)*.10] = .0720+.06=.132=13.2%
State of Economy Boom Normal Recession Probability of State of Economy 10% 75%o 15% Returns if State Occurs Stock N Stock M 10% 18% 70% 8% -20% 60%
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