Question: Business analysts want to form a portfolio. Two popular stocks (Microsoft and Walmart) were selected. Expected return on investment (ROI) and standard deviation for each stock are shown in the table below. The analysts assume that two stocks are negatively correlated, and the correlation is (-0.8). The plan is to invest \(75 \%\) into Microsoft stocks, and the remaining \(25 \%\) into Wal-Mart stocks. The values (expected ROI and sd) are shown in cents per dollar, per year.

Consider a random variable, \(\mathbf{t}=(0.75) \mathbf{m}+(0.25)\) w.

1. Find the expected ROI for the portfolio.
   \(\mathbf{e}[\mathbf{t}]=\)
2. Find the volatility (measured as the population standard deviation of t) \(\mathrm{sd}[\mathrm{t}]=\)

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