a.

Mr. Ahmed

wants to invest 1000000. He has 2 options

Stock A

Stock B

% returns

Prob.

% returns

Prob.

7

0.2

12

0.5

11

0.3

19

0.35

-

5

0.5

-

11

0.15

i.

Calculate expected return for security A and B.

ii.

Calculate stand along risk for both

the securities.

iii.

Calculate portfolio return.