Consider the following 6 months of returns for 2 stocks and a portfolio of those 2 stocks.

Jan Feb Mar Apr May Jun

Stock A 2% 5% 6% 3% 2% 4%

Stock B 0% 3% 8% 1% 4% 2%

Portfolio 1% 1% 1% 1% 1% 1%

a. What is the expected return and standard deviation of returns for each of the two stocks?

b. What is the expected return and standard deviation of return for the portfolio?

c. Is the portfolio more or less risky than the two stocks? Why?