Question
(2) Imagine that you are evaluating the following returns from portfolios of assorted stocks: Portfolio A 10% 5% 6% 4% 3% 2% Portfolio B 5%
(2) Imagine that you are evaluating the following returns from portfolios of assorted stocks:
| Portfolio A | 10% | 5% | 6% | 4% | 3% | 2% |
| Portfolio B | 5% | 6% | 7% | 2% | 5% | 6% |
(a) What is the expected return from Portfolio A? (5 Points)
(b) What is the standard deviation of the portfolios? Using the coefficient of variation, explain why Portfolio A is more or less volatile than Portfolio B. (10 Points)
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