UMB Advisor also specializes in providing advice to clients about their overall asset allocation strategy. For all of his clients, Andy manages portfolios that lie on the efficient frontier. Caleb asks Andy to review the two new portfolios that UMB launched last week. Newton Portfolio and Boston Portfolio. The expected returns of the two portfolios are significantly different. Using the assumptions of capital market theory, Andy determines that the Newton portfolio is the market portfolio. Andy made the following statements about two portfolios.

In response to a Caleb question regarding Capital Market Line and Market portfolio, Andy give the following example.

Example:

Newton Portfolio, the market portfolio, has an expected return of $12$ percent and a standard deviation of $19$ percent. The risk free rate is $5$ percent. Using the data in the example and the Capital market theory, Andy made following statements:

Statement $5$: Based on the information in the example, If Boston portfolio is a well$-$diversified portfolio and has a standard deviation of $7$ percent, the expected return on a well$-$diversified Boston portfolio would be $7\mathrm{.}58\%.$

Statement $6$: Based on the information in the example, If Boston portfolio is a well$-$diversified portfolio and has an expected return of $20$ percent, the standard deviation of a well$-$diversified Boston Portfolio would be $40\mathrm{.}71\%.$