Combining the Riskless Asset and a single Risky Asset Your statistics background tells you how to determine the expected return and volatility of any two- security portfolio 1.Form a new random variable, the return of the portfolio,Rp, from the two given random variables,Ri and R2 Rp W1*R1+W2*R2 Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall 15Combining the Riskless Asset and a Single Risky Asset  Your statistics background tells you how to determine the expected return and volatility of any two- security portfolio 1. Form a new random variable, the return of the portfolio,RP, from the two given random variables, R1 and R2 RP = W1 *R1 + W2 *R2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15