Stock A has an expected return of 16 percent,and stock B has an expected return of 8 percent.However,the risk of stock A as measured by its variance is 3.2 times that of stock B.If the two stocks are combined equally in a portfolio,what would be the portfolio's expected return?
A) 11.50%
B) 9) 50%
C) 12.00%
D) 8) 25%
E) 14.10%
Correct Answer:
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