(a)An investor holds a portfolio which is expected to yield a rate of return of 18% with a standard deviation of 2.5%. The investor is considering buying a new share (investment being 5% of the total investment in the new portfolio). The share has the following distribution of return:

RETURN PROBABILITIES

40% 0.30

30% 0.40

-10% 0.30

The correction coefficient between the new portfolio and the new security is 0.3; calculate the portfolio return and standard deviation of the portfolio.