You have been asked for your advice in selecting a portfolio of assets and have been supplied with the following data:

Projected Return
Year	Asset A	Asset B		Asset C
2018	10%	15%		11%
2019	12%	13%		13%
2020	14%	11%		15%

You have been told that you can create two portfolios-- one consisting of assets A and B and the other consisting of assets A and C-- by investing equal proportions (50 %) in each of the two component assets.

a. What is the average expected return, r, for each asset over the 3-year period?

b. What is the standard deviation, s, for each asset's expected return?

c. What is the average expected return, rp, for each of the the portfolios?

d. How would you characterize the correlations of returns of the two assets making up each of the portfolios identified in part c?

e. What is the standard deviation of expected returns, sp comma for each portfolio?

f. Which portfolio do you recommend? Why?