Question: Can you please further explain the correct answer (Answer B) 26) An investor can design a risky portfolio based on two stocks, A and B.

Can you please further explain the correct answer (Answer B)

26) An investor can design a risky portfolio based on two stocks, A and B. The standard deviation of return on stock A is 20%, while the standard deviation on stock B is 15% The correlation coefficient between the returns on A and B is 0%. The rate of return for stocks A and B is 20% and 10% respectively. The expected return on the minimum-variance portfolio is approximately A) 10.0% B) 13.6% C) 15.6% D) 19.4% Answer is B

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