Lets assume you want to create 2 asset portfolio using XYZ Inc. and ABC Inc. You decided to give 60% weight to XYZ Inc. and 40% weight to ABC Inc. (20 Points)

Asset	E(R)	Weight (W)	2
XYZ Inc.	35%	0.65	0.0064
ABC Inc.	20%	0.35	0.81

Find expected return of your portfolio.

Find individual asset S.D. from given variance in the table. How do you interpret risk using newly obtained S.D.?

Find the Portfolio S.D. when correlation between XYZ Inc. and ABC Inc. is: (i) +1.00, (ii) 0, (iii) -0.50 and (iv) -1.00

How do you interpret your results from part (c) for all four cases of correlation? Explain briefly.