Case-2 : Portfolio Risk Return Analysis under market volatility.

Case Scenario :

A mutual fund manages a diversified equity portfolio for long term institutional investors such as person funds and insurance companies. The fund manager is considering restructuring part of its portfolio using two major listed stocks :

Stock	Portfolio weight	Expected Returns	Beta
Stock X	50%	14%	1.4
Stock Y	50%	10%	0.6

Additional market information :

Risk free rate : 6%

Expected Market Return : 13%

Questions :