Chris Smith owns a portfolio consisting of two stocks, Amazon.com and Apple, Inc. Chris owns $2,000 of Amazon.com and $6,500 of Apple, Inc. Chris has computed the expected return on Amanzon.com to be 8.2% and the expected return on Apple, Inc. to be 9.5%. The standard deviation of the returns on Amazon.com is 5.07% and the standard deviation of the returns on Apple, Inc. is 6.84%. The covariance on the returns of the two companies is -0.0014.

12. What is the expected return on Chris portfolio?

A. 6.39 percent B. 7.70 percent C. 9.99 percent D. 7.89 percent E. 9.19 percent

13. What is the risk of this portfolio (measured by standard deviation)?

A. 4.87 percent B. 4.26 percent C. 2.73 percent D. 7.46 percent E. 3.82 percent

Please show work for 13