Q1 Calculate the expected return of the portfolio to two decimal places and choose the correct response.

Q2 Calculate the variance of the portfolio rounded to one decimal place and choose the correct response.

Q3 Calculate the standard deviation of the portfolio rounded to one decimal place and choose the correct response.

Q4 If the correlation coefficient was now -0.1 between Asset 1 and Asset 2 what would be the portfolio mean and standard deviation?

A Lower mean; no change in standard deviation

B No change in mean; higher standard deviation

C Higher mean; no change in standard deviation

D No change in mean; lower standard deviation

The following two assets are available choices for an investor to build a portfolio. Asset Asset 1 Asset 2 Expected return 5% 10% Variance 3% 11% The correlation coefficient between the Asset 1 and Asset 2 is 0.1. The investor decided to allocate 45% of his portfolio to Asset 1 and 55% to Asset 2