Question: Using the data in the following table, 2010 2011 2012 2013 2014 2015 Stock A -10% 20% 5% -5% 2% 9% Stock B 21% 7%

Using the data in the following table,

2010 2011 2012 2013 2014 2015 Stock A -10% 20% 5% -5% 2% 9% Stock B 21% 7% 30% -3% -8% 25%

consider a portfolio that maintains a 50% weight on stock A and a 50% weight on stock B.

a. What is the return each year of this portfolio?

b. Based on your results from part (a), compute the average return and volatility of the portfolio.

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