After thorough analysis on Lisa's financial and personal circumstances, you suggest a new investment portfolio that includes Walmart Inc. (WMT) and Bank of America Corporation (BAC) stocks. You suggested the asset mix to be 40% allocation in WMT, and 60% in BAC. You supplemented this recommendation with the historical returns of the two stocks for last 4 years, as well as the expected dividends and expected values for $1,000 original investments in this portfolio. You have also calculated the correlation between WMT and BAC, which is 0.81.

Exhibit 1

Historical annual returns of WMT and BAC from 2016 to 2019 below: