Consider the following two assets: Asset Expected return Standard deviation of returns 1 18% 30% 2 8% 10% The returns on the two assets are perfectly negatively correlated (i.e. coefficient of -1). Calculate the proportions of assets 1 and 2 that generate a portfolio with a standard deviation of zero. What is the expected return of that portfolio Calculate the expected returns and standard deviations of three other portfolios with weightingsof your choice. Present a graph of your results.
Consider the following two
Asset Expected return Standard deviation of returns
1 18% 30%
2 8% 10%
The returns on the two assets are perfectly negatively correlated (i.e. coefficient of -1).
Calculate the proportions of assets 1 and 2 that generate a portfolio with a standard deviation of zero.
What is the expected return of that portfolio
Calculate the expected returns and standard deviations of three other portfolios with weightingsof your choice. Present a graph of your results.
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