Question
Suppose Ford Motor stock has an expected return of 20 %20% and a volatility of 39 %39%, and Molson Coors Brewing has an expected return
Suppose Ford Motor stock has an expected return of 20 %20% and a volatility of 39 %39%, and Molson Coors Brewing has an expected return of 11 %11% and a volatility of 29 %29%. If the two stocks are uncorrelated, a. What is the expected return and volatility of a portfolio consisting of 71 %71% Ford Motor stock and 29 %29% 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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