You are a risk-averse investor. Suppose two stocks had the following historical returns

Stock A Stock B

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Year 1 -2% -3%

Year 2 8% 3%

Year 3 12% 10%

Year 4 1% 9%

Year 5 5% 12%

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Further suppose you have 3 investment options a) hold only Stock A, b) hold only Stock B or c) hold a portfolio consisting of 50% of each stock.

A) From a risk perspective only, which would you choose?

B) Why?