Expected return and Standard Deviation of a Portfolio..

Suppose Johnson & Johnson and the Walgreen Co. have expected returns and volatilities shown below, with a correlation of 22%. Calculate a) the expected return and b) the volatility (standard deviation) of a portfolio that is equally invested in Johnson & Johnson's and Walgreen's stock.

E[R] SD[R]
Johnson & Johnson 7% 16%
Walgreen Co. 10% 20%

See attached. Please show in excel.

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...ed in Johnson & Johnson's and Walgreen's stock.

E( R ) SD [R}
Johnson and Johnson 7% 16%
Walgreen Co. 10% 20%

The portfolio is equally invested in the two stocks, therefore, w1=w2= weights= 1/2=0.5
correlation ...