Expected return-standard deviation of return of portfolio

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An investor decides to create a portfolio of two stocks: Risky Inc. and Safe inc. Risky has an expected return of 15% and the standard deviation of its return is 7% On the other hand Safe inc is not as risky. It has n expected return of 6% and the standard deviation of its return is 2% The correlation coefficient of the two stocks return is -1.0. If the investor invest 50% in the Safe Inc. stock and the rest is Risky, what are the expected return and standard deviation of the return of the portfolio? is the portfolio more risky than Safe Inc. Explain?

Reference no: EM131551156

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