$($b$)$ Suppose you are constructing a portfolto of two assets and have the following information as shown below:

Calculate:

$($i$)$ The expected return of a portfolio where each asset has equal weights.

$(2$ marks$)$

Page $3$ of $5$

$($ii$)$ The covariance of asset $1$ and $2,$ assuming that their correlation is $0\mathrm{.}6,$ and comment on your result obtained.

$(4$ marks$)$

$($iii$)$ The variance of returns for the equally weighted portfolio and same covariance in part $($b$)($ii$)$ above.

$(2$ marks$)$

$($iv$)$ The standard deviation of returns for the equally weighted portfolio.

$(1$ mark$)$

$($c$)$ According to theories and literature, what factors will constitute an optimum $($best$)$ and rebalanced investment portfolio, containing at least two risky assets?

$(10$ marks$)$