Ebenezer Scrooge has invested 65% of his money in share A and the remainder in share B. He assesses their prospects as follows:

A 14B 23 Expected return (%)

Standard deviation (%)A 19 B 25

Correlation between returns.5

a.What are the expected return and standard deviation of returns on his portfolio?(Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

Expected return%

Standard deviation%

b.How would your answer change if the correlation coefficient were 0 or -.5?(Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

Correlation

Coefficient

0Correlation

Coefficient -.5Standard deviation%%

c.Is Mr. Scrooge's portfolio better or worse than one invested entirely in share A, or is it not possible to say?

BetterWorseNot possible to say