Irene adler is planning investing in the common stock of, Ask an Expert

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Irene Adler is considering investing in the common stock of Holmes and Watson. The following data are available for the two securities.

..................................... Holmes .............. Watson
Expected Return ............... 0.12 .................. 0.16
Standard Deviation ........... 0.08 .................. 0.20

If she invests 60% of her funds Holmes and 40% in Watson, and if the correlation of returns between these two securities is 0.45, what is the portfolio's expected return and standard deviation?

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