Mark harrywitz proposes to invest in two shares x and y he

Question

Question: Mark Harrywitz proposes to invest in two shares, X and Y. He expects a return of 12% from X and 8 % from Y. The standard deviation of returns are 8% for X and 5% for Y. The correlation coefficient between the returns is 0.2.

a. Compute the expected return and standard deviation of the following portfolios:

Portfolio                                  Percent in X                        Percent in Y

      1                                       50                                         50

      2                                       25                                         75

      3                                       75                                         25