Calculate the expected return, variance and standard deviation of a two-asset portfolio.

A portfolio is invested 40% in Asset 1 and 60% in Asset 2.

  

.2 .2 Asset 1: expected return, E (R) = 3, variance, o = var(R) = 1.5 Asset 2: expected return, E (R) = 5, variance, o = var(R) = 4.2 The correlation coefficient between Asset 1 and 2, r = corr(R, R) = 0.7