1.You have $1m to invest in two securities. Let x be the proportion of the investment in the 1st security and (1-x) in the 2nd. For simplicity, assume the two securities has identical and independent distributions. Namely, they have the same mean returns per investment dollar, same variances and their returns are statistically independent. Risks in a portfolio can be measured by the variance of its return. Which one will be better among the portfolio x= 0.25,x=0.45 and x=0.85?

Answer provided: x=0.45 will be a better one

I do not know how to go about doing this to achieve the answer.

2.The bivariate probability mass function of X and Y, p(x,y), is given by