in a situation where weights are not given means they are equally weighted. half half. we have to assume weight as 0.50 and 0.50.
so answer is:
take total of returns devide it by 5 (total number of years) = you will get average return for 1 security. do it for 2nd security also.
Return of portfolio = ( Weight 1 * average return of Security 1 ) + (weight 2 * average return of security 2)
weight = 0.50 for each.
Risk:
Using (X - X!) approach, deduct each year return from average return then square it.
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i did till this stage, i could not recall the formula to use without correlation. ?
i think this might be the way to solve that problem. dont know whether it is right or wrong. how you solved? anyone else?