Expected returns and standard deviations of stocks A and B are:

Expected Return

Standard Deviation

Stock A

6%

24%

Stock B

10%

34%

Stock C

11%

41%

Stock D

3.5%

11%

Portfolio X is composed 50% from stock A and 50% from stock B. Portfolio Y is composed 60% from stock C and 40% from stock D. What is true of the expected returns and standard deviations of portfolios X and Y?

Select one:

A.Expected returns and standard deviations of Portfolios X and Y are equal

B.Expected return and standard deviation of Portfolio Y are higher than those of Portfolio X

C.Expected returns of the two portfolios are equal; Portfolio Y has a higher standard deviation than Portfolio X

D.Expected returns of the two portfolios are equal; Need more information to compare standard deviations