Suppose you equally invest $700,000 in two stocks with the following characteristics: Stock A has an expected return of 10% and a standard deviation of 8%. Stock B has an expected return of 18% and a standard deviation of 14. ( do not solve on excel)

Determine the expected return and standard deviation on a portfolio of stocks A and B, when the two stocks have a negative correlation of -0.5 and when they are positively perfectly correlated.

Interpret and compare your answers in these two cases.