Jamie Wong is considering building an investment portfolio containing two stocks, L and M. Stock L will represent 55% of the dollar value of the portfolio, and stock M will account for the other 45%. The expected returns over the next 6 years, 2015-2020, for each of these stocks are shown in the following table:

Expected Return

Year

Year	Stock L	Stock M
2015	15%	23%
2016	17%	22%
2017	17%	21%
2018	19%	20%
2019	20%	19%
2020	21%	18%

Please solve the following problems and show all work! Thanks:

a. Calculate the expected portfolio return, for each of the 6 years (I already have these calculated)

	Expected Portfolio Return
2015	18.6%
2016	19.25%
2017	18.8%
2018	19.45%
2019	19.55%
2020	19.65%

b. The expected value of portfolio returns, over the 6-year period is (also have this)

19.22%

c. The standard deviation of expected portfolio returns, over the 6-year period is

d. How would you characterize the correlation of returns of the two stocks L and M?

e. Discuss any benefits of diversification achieved by Jamie throough creation of the portfolio