Question: Given three stocks, you have two options to create a portfolio with different weights Portfolio GUINESS% RYANAIR% NESTLE% A 40% 60% 0% B 20% 40%

Given three stocks, you have two options to create a portfolio with different weights

Portfolio

GUINESS%

RYANAIR%

NESTLE%

A

40%

60%

0%

B

20%

40%

40%
  1. Calculate the expected return of Portfolio A and Portfolio B
  2. Calculate the variances of Portfolio A and Portfolio B
  3. Given calculated results in (a)&(b), which Portfolio is more profitable? And provide reasons to justify your answer.

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