Security C has expected return of 20% and standard deviation of 25%. On the other hand, security D has expected return of 24% and standard deviation of 25%. Both securities have equal weights in the portfolio.

Calculate the portfolio variance if the correlation is i) 0.00 ii) 0.20 iii) 0.80 and iv) -0.20.

What inferences do you make from the calculations?

Note: Use excel shorcuts and share formulae.