How do determine what is the expected return on a portfolio

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Security FG  has an expected return of 11.0 percent and a standard deviation of 11 percent per year. Security has an expected return of 17.8 percent and a standard deviation of 36 percent per year.

Problem a. What is the expected return on a portfolio composed of 30 percent of security FGand 70 percent of security ? (Do not round the intermediate calculations. Round the final answer to 2 decimal places.)

Problem b. If the correlation between the returns of security F and security G is 0.75, what is the standard deviation of the portfolio described in part (a)?

Reference no: EM132751303

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