1. Assume you are considering investing your personal portfolio in only two possible risky assets: 60% invested in Asset Y and the rest in Asset Z. The characteristics of these two risky assets are as follows:
   • Asset Y has an Expected Return of 12% and a standard deviation of 15%
   • Asset Z has an Expected Return of 9% and a standard deviation of 12%
   • Correlation between the returns of Asset Y and Asset Z is 0.20

1. Find the Expected Return of this 2-Asset Portfolio.

2. What is the Standard Deviation of this 2-Asset Portfolio?

3. Finally, if the correlation were to suddenly drop to -0.3 and all other inputs stayed the same, in what direction would you expect this portfolios Sharpe Ratio to change? Why?