QUESTION 6

1. You are considering an investment in either individual stocks or a portfolio of stocks. The two stocks you are researching. Stock A and Stock B, have the following historical returns:

   Year A B

   2014. -21% -6.0%

   2015 38.0% 17.0%

   2016 20% -13.0%

   2017 -9.0% 40.0%

   2018 20.0% 11.0%

   Suppose you had held a portfolio consisting of 20% Stock A and 80% Stock B.

   Calculate the standard deviation of returns for each stock and for the portfolio.

   	a.	0.351, 0.420, 0.225
   	b.	0.452, 0.321, 0.298
   	c.	0.240, 0.208, 0.171
   	d.	0.280,0.249, 0.275