1. Given the following information, answer the following questions (20 points) (Please show the detail of your work)

	Stock A	Stock B
Expected return, E(R)	14%	10%
Standard deviation,	42%	31%
Correlation,	0.1

1. What is the expected return, E(R_P), for a portfolio that has 50 percent invested in stock A, and 50 percent in stock B? (2 points).

2. What is the standard deviation, _P, for a portfolio that has 50 percent invested in stock A, and 50 percent in stock B? (2 points).

3. What is the standard deviation if the correlation between stock A and B is +1.0? (2 points).

4. What is the standard deviation if the correlation between stock A and B is 0? (2 points).

5. What is the standard deviation if the correlation between stock A and B is 1.0? (2 points).

6. What are the expected return and standard deviation on the minimum variance portfolio? (10 points)