2 stocks have returns per share X and Y, with

E(X) = E(Y) = 3

Var(X) = 1

Var(Y) = 2

Cov (X,Y) = -1/2

Buy s shares of X, and t shares of Y

a) Find total diffential of variance of the returns

b) I have 10 shares of each stock. Buy share of first stock, and sell one of the second. Estimate change in the variance of the portfolio.

c)Find maximal expected return of a portfolio with variance 250