Assume you are considering a portfolio containing two assets, L and M. Asset L will represent 35% of the dollar value of the portfolio, and asset M will account for the other

65%.The projected returns over the next 6 years, 20182023, for each of these assets are summarized in the following table:

Projected Return
Year	Asset L		Asset M
2018	13%		21%
2019	14%		18%
2020	15%		15%
2021	16%		13%
2022	17%		13%
2023	18%		9%

a. Calculate the projected portfolio return, rp,for each of the 6 years.

b. Calculate the average expected portfolio return, rp, over the 6-year period.

c. Calculate the standard deviation of expected portfolio returns, sp, over the 6-year period.

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

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