Calculate the expected return and standard deviation of the portfolio consisting of two stocks, A & B.

You start to invest 100% in stock A and 0% in stock B, then 99% in stock A and 1% in stock B, 98% in stock A and 2% in stock B until 0% in stock A and 100% in stock B.

Average Return:

GTW	0.210%
JNJ	0.097%
K	0.045%
MRK	0.134%

Standard Deviation=

GTW	0.0367
JNJ	0.0165
K	0.0167
MRK	0.0188

Correlation=

GTW/JNJ	0.1590
GTW/K	0.0091
GTW/MRK	0.1254
JNJ/K	0.3885
JNJ/MRK	0.6273
K/MRK	0.3882

There are six combinations of two stocks.

G, JJ G, K G, M

JJ, K

JJ, M

K, M