Suppose that you wish to invest in two stocks which both have a current price of $1. The values of these two stocks in one month are described by two random variables. say. X1 and X2. Suppose that the expected values and variances of X1 and X2 are Mu1 , Mu1, sigma21, and sigma22 , respectively. We also assume that the correlation between the stocks is given by p. Let c denote your initial investment, which is to be invested in the stocks, and assume that shares can be bought up to any percentages. Let w denote the percentage of your investment in stock 1. Finally, let P denote the value of your portfolio (investment) after a month. Then we have that P = c (wX 1 + (1 -w ) X2). where 0