Two asset portfolio

E(r) s
Bond 5.0% 10.0% Bond-Stock Portfolio
Stock 12.0% 25.0%
14.00%

Correlation 1.0
12.00%

wB wS E(r) s
1 1.00 0.00 5.00% 10.00% 10.00%
2 0.90 0.10 5.70% 11.50%

Expected return
3 0.80 0.20 6.40% 13.00%
8.00%
4 0.70 0.30 7.10% 14.50%
5 0.60 0.40 7.80% 16.00%
6 0.50 0.50 8.50% 17.50% 6.00%
7 0.40 0.60 9.20% 19.00%
8 0.30 0.70 9.90% 20.50%
9 0.20 0.80 10.60% 22.00% 4.00%
10 0.10 0.90 11.30% 23.50%
11 0.00 1.00 12.00% 25.00%
2.00%

0.00%
8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00% 22.00% 24.00% 26.00%

Risk