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Suppose Ford Motor stock has an expected return of 16% and a volatility of 40%, and Molson Coors Brewing has an expected return of 14%
Suppose Ford Motor stock has an expected return of 16% and a volatility of 40%, and Molson Coors Brewing has an expected return of 14% and a volatility of 28%. If the two stocks are uncorrelated,
a. What is the expected return and volatility of a portfolio consisting of 66% Ford Motor stock and 34% of Molson Coors Brewing stock?
b. Given your answer to (a), is investing all of your money in Molson Coors stock an efficient portfolio of these two stocks?
c. Is investing all of your money in Ford Motor an efficient portfolio of these two stocks?
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