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1 . Suppose you had held a portfolio consisting of 6 0 % of Stock A and 4 0 % of Stock B . Calculate

1. Suppose you had held a portfolio consisting of 60% of Stock A and 40% of Stock B.
Calculate the average rate of return and standard deviation for the portfolio.
2. Suppose you are a risk-averse investor. Assuming Stocks A and B are your only choices,
would you prefer to hold Stock A, Stock B, or the portfolio? Why?
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