The following tables shows data relating two companies, X and Y.

Company	Expected return (%)	Variance (%)
X	10	0.64
Y	5	0.09

The correlation between Share X and Y is negative 20%.

Using the information in the above table answer the following questions:

1. Calculate weights for the minimum variance portfolio .

3 marks

2. Calculate the expected return of the minimum variance portfolio.

1 marks

3. Calculate the standard deviation of the minimum variance portfolio.

4 mark

Formulae

Weight for share X to achieve minimum variance

Weight for share X to achieve minimum variance

W_Y =1-W_X

Portfolio return (R_P)

R_P = W_X*R_X+W_Y*R_Y

Portfolio standard deviation (_P)

_{p =}[(W_x*x)²+ (W_y*_y)²+2*W_x*x*W_y*_y*_xy]^0.5