Look again at problem 3. Suppose Stock As returns have a standard deviation of 5%. Stock Bs returns have a standard deviation of 7%. What will be the standard deviation of your portfolio? For your convenience, Problem 3 read as follows:

Suppose you own a portfolio with two stocks with equal weightings in your portfolio. Stock A returns on average 10% per year. Stock B on average returns 12% per year. What is the expected return on your portfolio?

Select one:

a. 5%

b. 6%

c. 7%

d. Cannot determine based on the data given