Suppose Target's stock has an expected return of $18\%$ and a volatility of $44\%,$ Hershey's stock has an expected return of $12\%$

and a volatility of $29\%,$ and these two stocks are uncorrelated.

a$.$ What is the expected return and volatility of an equally weighted portfolio of the two stocks?

Consider a new stock with an expected return of $15\mathrm{.}0\%$ and a volatility of $29\%.$ Suppose this new stock is uncorrelated

with Target's and Hershey's stock.

b$.$ Is holding this stock alone attractive compared to holding the portfolio in $($a$)?$

c$.$ Can you improve upon your portfolio in $($a$)$ by adding this new stock to your portfolio? Explain.

a$.$ What is the expected return and volatility of an equally weighted portfolio of the two stocks?

The expected return is

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

The volatility is $\%.($Round to two decimal place.$)$

Consider a new stock with an expected return of $15\mathrm{.}0\%$ and a volatility of $29\%.$ Suppose this new stock is uncorrelated

with Target's and Hershey's stock.

b$.$ Is holding this stock alone attractive compared to holding the portfolio in $($a$)?($Select the best choice below.$)$

A$.$ Yes, the new stock dominates Target.

B$.$ Yes, the new stock dominates Hershey, so you should hold this stock alone.

C$.$ No$,$ Target dominates the new stock.

D$.$ No$,$ a combination of the Hershey and Target stocks has the same expected return but with a lower volatility.

c$.$ Can you improve upon your portfolio in $($a$)$ by adding this new stock to your portfolio? Explain. $($Select the best