1. An investment has the following range of outcomes and probabilities:

Outcomes - Probability of Outcomes

8% 0.20

12% 0.60

17% 0.20

Calculate the expected value.

(Report a number and keep 4 decimal places. e.g. report 0.1501 instead of 15.01%.)

2. What would be the portfolio standard deviation if the two investments as below had a correlation coefficient (r_ij) of 0.73? (Report a number and keep 4 decimal places. e.g. report 0.1501 instead of 15.01%.)

Xi = 0.4, std=2.32

Xj = 0.6, std= 3.1