What are henry portfolio return and risk

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Henry is analysing two financial assets A and B and predicting the following scenarios in the next 6 months:

Scenario                    Asset A's return             Asset B's return

Good (prob = 25%)       15%                          18%

Average (Prob = 40%)      7.5%                      8%

Poor (Prob = 35%)          1%                          -1%

Problem a. Calculate the expected return and standard deviation of Asset A and B

Problem b. If Henry is investing 40% in A and the remaining in B, what are Henry's portfolio return and risk? Given the covariance between A and B is -0.2

Reference no: EM132965431

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