Portfolio 1 has two stocks:

Stock A has a standard deviation of 15% per year with an expected return of 11% per year, and Stock B has a standard deviation of 21% per year

with an expected return of 15% per year. The correlation between Stock A and Stock B is .30. You have 1.5 times as much of Stock B

as you do of Stock A.

Portfolio 2 has two stocks:

Stock C has a standard deviation of 24% per year with an expected return of 11.1% per year, and Stock D has a standard deviation of 16% per year

with an expected return of 14% per year. The correlation between Stock C and Stock D is .30. You have 4 times as much of Stock D

as you do of Stock C.

I. What are your portfolio standard deviations? (round to the nearest 0.1 percent)

II. Which portfolio exposes you to more risk per unit of return? (round to three decimal places)