Given:

	E(R1) = 0.07
	E(R2) = 0.11
	E(1) = 0.02
	E(2) = 0.04

Calculate the expected returns and expected standard deviations of a two-stock portfolio in which Stock 1 has a weight of 60 percent under the conditions given below. Do not round intermediate calculations. Round your answers for the expected returns of a two-stock portfolio to three decimal places and answers for expected standard deviations of a two-stock portfolio to four decimal places.

r_1,2 = 1.00

Expected return of a two-stock portfolio:

Expected standard deviation of a two-stock portfolio:

r_1,2 = 0.75

Expected return of a two-stock portfolio:

Expected standard deviation of a two-stock portfolio:

r_1,2 = 0.20

Expected return of a two-stock portfolio:

Expected standard deviation of a two-stock portfolio:

r_1,2 = 0.00

Expected return of a two-stock portfolio:

Expected standard deviation of a two-stock portfolio:

r_1,2 = -0.20

Expected return of a two-stock portfolio:

Expected standard deviation of a two-stock portfolio:

r_1,2 = -0.75

Expected return of a two-stock portfolio:

Expected standard deviation of a two-stock portfolio:

r_1,2 = -1.00

Expected return of a two-stock portfolio:

Expected standard deviation of a two-stock portfolio: