15 8 10 Juan is considering investing in three different stocks or creating distinctive two-stock portfolios. Juan considered himself to be a rather conservative investor. He is able to obtain the returns for the three securities for the years 2022 through 2028. Year Stock A Stock B Stock C 2022 10% 10% 12% 2023 13 11 14 2024 2025 14 12 11 2026 16 2027 2028 Juan determined the expected return, standard deviation and coefficient variation for each individual stock as follows: Stock A Stock B Stock C Expected Return 13.43% 11.57% 10.71% Standard Deviation 1.99% 2.64% 1.80% 14.80% 22.79% 16.80% 14 12 10 15 15 9 9 10 In any of the possible portfolios, the weight of each stock in the portfolio will be 50%. The three possible portfolio combinations are AB, AC, and AB. Which of the three stocks is the most risky? Explain. Your answer Calculate the expected returns for portfolio AB. AC, and BC. Your answer Calculate the standard deviations for portfolio AB, AC, and BC. Your answer Would you recommend that Juan invest in the single stock A or the portfolio consisting stocks A and B? Explain your answer from a risk-return viewpoint. Your answer What portfolio would you recommend to Juan? Explain. Your