The following statistics and estimates were compiled by Big Moon Bank regarding a proposed new branch office and the bank itself:
Branch office expected return ............ = 15%
Standard deviation of branch return......... = 8%
Existing bank’s expected return .......... = 10%
Standard deviation of existing bank’s return..... = 5%
Branch asset value as a percentage of total bank assets .... = 16%
Correlation of net cash flows for branch and bank as a whole .. = +0.48