Harry jones has invested onethird of his funds in share 1

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Reference no: EM13617027

Harry Jones has invested one?third of his funds in Share 1 & two?thirds of his funds in Share 2. His assessment of each investment is as follows:

  Item                                      Share 1             Share 2
Expected return (%)                    15.0                  21.0
Standard deviation (%)                18.0                  25.0
Correlation between the returns      .5

(a) What are the expected return & the standard deviation of return on Harry's portfolio?

(b) Recalculate the expected return & the standard deviation where the correlation between the returns is 0 and 1.0, respectively.

Reference no: EM13617027

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