An investor is considering to form a Portfolio of two stocks out the three stocks A, B and C. The information regarding the stocks is as follows:

Stock A Stock B Stock C

Average Return (%) 12 12 12

Std. Deviation of returns (%) 10 15 11

The coefficient of correlation between stocks A & B is -0.8 and that between Stocks A & C is 0.1 . Calculate the Expected return and Risk of the following portfolios -:

1) A portfolio comprising 50% invested in Stock A and 50% Invested in stock B

2) A portfolio comprising 50% invested in Stock A and 50% Invested in stock C

Which Portfolio out of the above would you recommend for Investment and Why? (Justify)