stock A B

ER 11.00% 2.00%
St.Dev. 14.00% 3.00%
correlation -0.7 Portfolio return and st. dev
WEIGHTS ER(portf) StDev(portf)
100.00% 0.00% 11.00% 14.00%
12.00%
98.00% 2.00% 10.82% 13.68%
96.00% 4.00% 10.64% 13.36%
94.00% 6.00% 10.46% 13.03% 10.00%
92.00% 8.00% 10.28% 12.71%
90.00% 10.00% 10.10% 12.39%
88.00% 12.00% 9.92% 12.07%
86.00% 14.00% 9.74% 11.75% 8.00%
84.00% 16.00% 9.56% 11.43%

ER
82.00% 18.00% 9.38% 11.11%
80.00% 20.00% 9.20% 10.79%
78.00% 22.00% 9.02% 10.47% 6.00%
76.00% 24.00% 8.84% 10.15%
74.00% 26.00% 8.66% 9.83%
72.00% 28.00% 8.48% 9.51%
70.00% 30.00% 8.30% 9.19% 4.00%
68.00% 32.00% 8.12% 8.87%
66.00% 34.00% 7.94% 8.56%
64.00% 36.00% 7.76% 8.24%
62.00% 38.00% 7.58% 7.92% 2.00% B
60.00% 40.00% 7.40% 7.61%
58.00% 42.00% 7.22% 7.29%
56.00% 44.00% 7.04% 6.98%
54.00% 46.00% 6.86% 6.67%
0.00%
0% % % % 0% %
52.00% 48.00% 6.68% 6.36%
0 0 0 0 0
50.00% 50.00% 6.50% 6.05%
0 . 2 .0 4 .0 6 .0 . 0 .0
8 St. Dev.
48.00% 52.00% 6.32% 5.74% 10 12
46.00% 54.00% 6.14% 5.43%
44.00% 56.00% 5.96% 5.13%
42.00% 58.00% 5.78% 4.82%
40.00% 60.00% 5.60% 4.53%
38.00% 62.00% 5.42% 4.23%
36.00% 64.00% 5.24% 3.94%
34.00% 66.00% 5.06% 3.66%
32.00% 68.00% 4.88% 3.38%
30.00% 70.00% 4.70% 3.11%
28.00% 72.00% 4.52% 2.86%
26.00% 74.00% 4.34% 2.62%
24.00% 76.00% 4.16% 2.40%
22.00% 78.00% 3.98% 2.21%
20.00% 80.00% 3.80% 2.05%
18.00% 82.00% 3.62% 1.93%
16.00% 84.00% 3.44% 1.86%
14.00% 86.00% 3.26% 1.85%
12.00% 88.00% 3.08% 1.89%
10.00% 90.00% 2.90% 1.99%
8.00% 92.00% 2.72% 2.13%
6.00% 94.00% 2.54% 2.31%
4.00% 96.00% 2.36% 2.52%
2.00% 98.00% 2.18% 2.75%
0.00% 100.00% 2.00% 3.00%
return and st. dev.

%
00% 0 % 0 % 0 % 0 %
. .0
8 St. Dev. .0 .0 .0
10 12 14 16