Price in 2017 of stock X and Y are $54 and $32 respectively. A financial analyst of ABC Security Company forecasts the price of stock X and Y after 1 year as following:

data in table

a. What are expected return and standard deviation of the two stocks.

b. What are expected return and standard deviation of the risky portfolio P which invests 60% in stock X and 40% in stock Y.

c. What are expected return and standard deviation of the completed portfolio if the financial analyst decide to invest 37.68% in risky portfolio in part (b) and the remainding in risk-free asset with a return of 2%?

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Price in 2013 of stock X and Y are $54 and $32 respectively. A financial analyst of ABC Security Company forecasts the price of stock X and Y after 1 year as following:

Period Y 2014 52 30 2015 58 39 2016 55 32 2017 53 37 2018 64 39