What are expected return & the standard deviation of return

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Reference no: EM13329070

2 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 0.5

(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: EM13329070

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