Question: How to do this question Consider the following details for two shares, Share A and B. (a) What is the expected return for each share?

How to do this question Consider the following details for two

How to do this question

Consider the following details for two shares, Share A and B. (a) What is the expected return for each share? Formula:E(R)=PiRi (b) What is the risk for each share? Formula :=(RiE(R))2Pi (c) What is the expected return on a portfolio consisting of 40% in Share A and 60% in Share B? (d) What is the risk of the portfolio in (c)? Formula:=(RiE(RP))2Pi (e) Explain the principle of diversification using your answers from (a) to (d) above

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