Kindly help in solving the following questions.

Portfolio return and standard deviation Personal Finance Problem Jamie Wong is thinking of building an investment portfolio containing two stocks, L and M. Stock L will represent 40% of the dollar value of the portfolio, and stock M will account for the other 60%. The historical returns over the next 6 years, 20132018, for each of these stocks are shown in the following table:

Expected return

Year

Stock L

Stock M

2013

14%

20%

2014

14%

18%

2015

16%

16%

2016

17%

14%

2017

17%

12%

2018

19%

10%

a. Calculate the actual portfolio return, rp, for each of the 6 years.

b. Calculate the expected value of portfolioreturns, rp, over the 6-year period.

c. Calculate the standard deviation of expected portfolio returns, rp, over the6-year period.

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 through creation of the portfolio.