Portfolio Expected Return Calculation

In portfolio management, understanding the impact of diversification on portfolio risk and return is crucial. The concept of diversification suggests that an investor can reduce the overall risk of the portfolio by investing in assets that are not perfectly correlated with one another.

Consider a portfolio consisting of two assets: Asset X, which has an expected return of 10% and a standard deviation of 15%, and Asset Y, which has an expected return of 6% and a standard deviation of 10%. The correlation coefficient between these two assets is 0.2. If 60% of the portfolio is allocated to Asset X and 40% to Asset Y, what is the expected return of the portfolio?