You have recently been hired by Christopher to assist him in evaluating the projected performance of a portfolio he is planning to construct. The following data is available for the securities he is considering to purchase:

Security	Expected return	Standard deviation	Beta
SGR	22%	17%	1.33
XRO	6%	4%	0.47
TPM	14%	8%	1.25

Your client is planning to invest 65% of his capital in security XRO, with the remainder being invested in security TMP. Previous analysis has found the correlation of returns between these two securities is 0.60.

Required:

1. If Christopher constructs the portfolio as he originally intended, calculate the expected return and the standard deviation of the resulting portfolio.
2. Assuming portfolio returns are normally distributed, what is the probability of the returns being less than 6% (i.e. the expected return if he only invested in XRO) for the portfolio created in Part a)?
3. The All Ordinaries Index (market portfolio) is currently valued $7,158 Assuming the market is expected to appreciate in value to $8,446.44 in one year, determine the expected rate of return on the market portfolio.
4. Assuming portfolio returns are normally distributed, what is the probability of incurring a return more than the market portfolio (as determined in Part c)) for the portfolio created in Part a)?