You are given the expected return and standard deviation of Asset 1 and Asset 2: E(R1) = 10%, 1 = 10% E(R2) = 14%, 2

You are given the expected return and standard deviation of Asset 1 and Asset 2:
E(R1) = 10%, σ1 = 10%
E(R2) = 14%, σ2 = 16% The correlation between the two assets is p = 0.2.
a. Calculate the expected return and risk of portfolios invested in the following proportions:
Asset 1 Asset 2
100%............................ 0%
80%.............................. 20%
60%.............................. 40%
50%.............................. 50%
40%.............................. 60%
20%.............................. 80%
0%................................ 100%
b. Use the expected return and risk calculations for all the portfolios to plot an expected return-risk graph.