Suppose you equally invest $700,000 in two stocks with the following characteristics: Stock X has an expected return of 12% and a standard deviation of 8%. Stock T has an expected return of 22% and a standard deviation of 14%.

Determine the expected return and standard deviation on a portfolio of stocks X and T, when the two stocks are uncorrelated and when they are negatively perfectly correlated.

Interpret and compare your answers in these two cases