Consider the following information for two securities: Security 1 offers an expected return of 10% and has a standard deviation of 30%. Security 2 offers an expected return of 15% and has a standard deviation of 50%. The correlation between the returns on these two securities is 0.25.

Estimate the approximate weightings of each security in the portfolio of security 2.

% Security 1 % Security 2 %E(R) %Standard Deviation 100 0 10 30 80 20 11 68.38 60 40 12 50.24 40 60 13 53.33 20 80 14 53.25 100 15 50 % Security 1 % Security 2 %E(R) %Standard Deviation 100 0 10 30 80 20 11 68.38 60 40 12 50.24 40 60 13 53.33 20 80 14 53.25 100 15 50