Portfolio With Two Risky Assets The two risky securities Security 1: E(r1=5%, 01=20% Security2:E(r2)=15%,2=40% The bounds on the location of portfolio by calculating the expected returns and standard deviations of the portfolios under different correlation and weights. Diversification leads to risk reductionPortfolio With Two Risky Assets • The two risky securities Security 1: E(r1)=5%, 1=20% Security 2: E(r2)=15%, 2=40% • The bounds on the location of portfolio by calculating the expected returns and standard deviations of the portfolios under different correlation and weights. • Diversification leads to risk reduction