Table 1
Expected return Stock X 14% Stock Y 18%
Standard deviation Stock X 30% Stock Y 54%
Beta Stock X 1.20 Stock Y 1.50
Correlation (X,Y)=0.3
1. Please use the information from Table 1
1. What are the expected return and standard deviation of return for a portfolio with 40% invested in X and 60% invested in Y? (show your work)
2. What is the beta for a portfolio with 70% invested in X and 30% invested in Y? (show your work)
3. What is the covariance between Stock X and Stock Y? (show your work)