Investment A has an expected return of 10% with a standard deviation of 3.5%. Investment B has an expected return of 6% with a standard deviation of 1.2%. If you invest equally in both investments; a) What is the expected return and standard deviation of your portfolio assuming the rates of return are independent? b) If your initial total investment was $1000, what is the probability that your portfolio value is worth more than $1000? (hint: find the distribution of portfolio using the mean and variance of the rates you obtained in a)
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