Suppose you have $20,000 that you want to invest in two companies, Calgary Oil Company and Edmonton

Question:

Suppose you have $20,000 that you want to invest in two companies, Calgary Oil Company and Edmonton Aluminum. Calgary has a return of 12% and standard deviation 25%, while Edmonton has return of 16% with a standard deviation of 32%. The correlation coefficient between them is 40%. Your should have a return of 13%.
(a) Find the amount invested in each of the two companies.
(b) Find the standard deviation of this portfolio's returns.

Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...