Question: Security F has an expected return of 12 percent and a standard deviation of 9 percent per year. Security G has an expected return of 18 percent and a standard deviation of 25 percent per year.
Q1. What is the expected return on a portfolio composed of 30 percent of security F and 70 percent of security G?
Q2. If the correlation between the returns of security F and security G is 0.2, what is the standard deviation of the portfolio described in part (1)?