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You have the following information regarding rates of return for two stocks (A and B): Rate of Return.C%) Probability Stock A Stock B 0.25 25
You have the following information regarding rates of return for two stocks (A and B): Rate of Return.C%) Probability Stock A Stock B 0.25 25 0.3 10 20 10 0.3 15 0.220 5 Expected rates of return (A)=12.5\% Expected rate of return (B)=15\% Standard deviation (A)=5.1235\% Standard deviation (B)=7.4162\% Suppose you want to construct the minimum-risk portfolio with stocks A and B. What will be the risk (standard deviation) of the minimum-risk portfolio?
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