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 20% of the dollar value of the portfolio, and stock M will account for the other 80%. The historical returns over the next 6 years, 2013-2018, for each of these stocks are shown in the following table: (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) a. Calculate the actual portfolio return,rp. for each of the 6 years b. Calculate the expected value of portfolio returns, p, over the 6-year period. c. Calculate the standard deviation of expected portfolio returns, . . over the 6-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 Expected return Year 2013 2014 2015 2016 2017 2018 Stock L 15% 16% 17% 17% 17% 19% Stock M 24% 22% 20% 18% 16% 14%