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What is the expected return of a portfolio

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Consider two stocks, C and D, with their expected returns and standard deviations, as follows:

                                     Stock C        Stock D

Expected return        20%             15%

Standard deviation   12%              9%

Question a. What is the expected return of a portfolio containing 30% of Stock C and 70% of Stock D? Express your answers in percent with two decimals.

Question b. What is the standard deviation of the portfolio if the correlation coefficient between the returns of the two stocks is 0.8? Express your answers in percent with two decimals.

Reference no: EM132484940

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