Question: The following table shows the annual expected returns for two stocks. Compare the risk and return from Stock A, Stock B and the portfolio of

The following table shows the annual expected returns for two stocks.

Compare the risk and return from Stock A, Stock B and the portfolio of both stocks. portfolio is made up of 40% of Stock A and 60% of Stock B. Where a profit maximizing risk taker will invest in?

Probability of return	Stock A	Stock B
0.10	-3%	-10%
0.20	2	1
0.40	7	8
0.20	12	16
0.10	17	24

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