Full question attached
Answer:
A. 8.6%
B. 14.09%
Explanation:
A) given that portfolio weights =50% each
Expected return= w*r+w*r where w is portfolio weight and r is return on each asset:
=0.50*0.078+0.50*0.094= 0.086
=8.6%
B) The volatility (standard deviation)
=√w²*std²+w²*std²+2*w*w*std*std*corr
=√0.50²*0.157²+0.50²*0.203²+2*0.50*0.50*0.157*0.203*0.213
=0.1409
=14.09%
