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

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.

Note:

The

portfolio is composed of 50% of Stock A and 50% of Stock B.

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 returns for the portfolio?

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

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Part 1

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

The expected return of Stock A is

(Round to one decimal place.)

Part 2

The expected return of Stock B is

(Round to one decimal place.)

Part 3

The standard deviation of Stock A is

(Round to five decimal places.)

For standard deviation of stock A and B, please be sure to round to 5 decimal places. Thank you!

Data table (Click on the following icon in order to copy its contents into a spreadsheet.)