Jason

Given two assets with the following characteristics:

Asset A: Expected Return-2 Variance-81 StDev- 9

Asset B: Expected Return-10 Variance-400 StDev-20

1. When correlation between the assets is -1, what is the best amount to invest in asset B?

A).31

B).69

C)Can't say

2. When correlation between the assets is 1, what is the best amount to invest in asset B?

A).31

B).69

C)Can't say

I feel these obviously use the same equation for solving, but I have no idea what equation to use and the professor didn't cover this in class. My book has offered very little help and the 3 times I thought I had found the right equation, I didn't get anything that resembled any possible answer (like getting negative answers or more than 100%). Any help would be appreciated.