Assume you are considering a portfolio containing two assets, L and M. Asset L will represent 40% of the dollar value of the portfolio, and asset M will account for the other 60%. The projected returns over the next six years, 20182023, for each of these assets are summarized in the following table.

	Projected Return (%)
Year	Asset L	Asset M
2018	14%	20%
2019	14%	18%
2020	16%	16%
2021	17%	14%
2022	17%	12%
2023	19%	10%

Use an Excel spreadsheet to calculate the projected portfolio return, r_p, for each of the six years.

Use an Excel spreadsheet to calculate the average portfolio return, r_p, over the six-year period.

Use an Excel spreadsheet to calculate the standard deviation of expected portfolio returns, s_p, over the six-year period.

How would you characterize the correlation of returns of the assets L and M?

Discuss any benefits of diversification achieved through creation of the portfolio.