You have the following information on two securities in which you have invested:

Security Expected Return Standard Deviation Beta Percent Invested (w)

Xerox 15% 4.5% 1.20 35%

Kodak 12% 3.8% 0.98 65%

a. Which stock is riskier in a portfolio context? Which stock is riskier if you are considering them as individual assets (not part of a portfolio)?

•b. Compute the expected return on the portfolio.

•c. If the securities have a correlation of þ0.60, compute the standard deviation of the portfolio.

d. Compute the beta of the portfolio?P=74