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

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

Data table

The expected return of Stock $A$ is

$\%.($Round to one decimal place.$)$

The expected return of Stock B is

$\%.($Round to one decimal place.$)$

The standard deviation of Stock $A$ is

$\%.($Round to two decimal places.$)$

The standard deviation of Stock B is $\%.($Round to two decimal places.$)$

$($Click on the following icon

in order to copy its contents into a spreadsheet.$)$

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

The expected return of a portfolio composed of $50\%$ Stock A and $50\%$ Stock B is $\%.($Roun

The standard deviation of a portfolio composed of $50\%$ Stock A and $50\%$ Stock B is $\%.($Rd

c$.$ Is the portfolio more or less risky than the two stocks? Why? $($Select the best choice below.

A$.$ The portfolio is less risky than the two stocks. It has the same expected return but a standard deviation of $1,$ compared to standard deviations of $0\mathrm{.}0420$ for both stocks.

B$.$ The portfolio is more risky than the two stocks. It has the same expected return but a standard deviation of $0,$ compared to standard deviations of $0\mathrm{.}0420$ for both stocks.

C$.$ The portfolio is less risky than the two stocks. It has the same expected return but a standard deviation of $0\mathrm{.}0420,$ compared to standard deviations of $0$ for both stocks.

D$.$ The portfolio is less risky than the two stocks. It has the same expected return but a standard deviation of $0,$ compared to standard deviations of $0\mathrm{.}0420$ for both stocks.