You are considering two assets with the following characteristics. E(R1) = 0.15 E(1) = 0.10 w1 = 0.5 E(R2) = 0.20 E(2) = 0.20 w2 = 0.5

a) Compute the mean and standard deviation of two portfolios if r1,2 (the correlation coefficient) is 0.40 and 0.60, respectively.

b) Plot the two portfolios on a riskreturn graph and briefly explain the results.