Question: You are looking at two risky assets, the expected returns, standard deviations, and correlation between the two assets are given below: E(R A ) =

You are looking at two risky assets, the expected returns, standard deviations, and correlation between the two assets are given below:

E(RA) = 7%, Standard deviation = 12%

E(RB) = 12%, Standard deviation = 18%

Correlation between the two assets is 1.0

2. If you put 50% of your wealth in asset A and the other 50% in asset B, what is the expected return and the standard deviation of your portfolio?

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