Question 1 You have been asked for your advice in selecting a portfolio of assets and have been supplied with the following data: (a) What are the average expected return and standard deviation for Asset A and Asset B? (10 marks) (b) Calculate the correlation and covariance of both assets. (10 marks) (c) You have been told that you can create a portfolio M consisting of 70% in A and balance in B. What is the average expected return and standard deviation for of the portfolio? (10 marks) (d) Give your comment on the calculated correlation between A and B in (b) and how will this help in diversification of a portfolio. (10 marks)