Question: Using the data in the following table consider a portfolio that maintains a 65% weight on stock and a 35% weight on stock 8 a.

 Using the data in the following table consider a portfolio that
maintains a 65% weight on stock and a 35% weight on stock

Using the data in the following table consider a portfolio that maintains a 65% weight on stock and a 35% weight on stock 8 a. What is the retum each year of this portfolio? b. Based on your results from part (a), compute the average return and volatility of the portfolio c. Show that the average return of the portfolio is equal to the weighted average of the average returns of the two stocks, and the volatility of the portfolio equals the same result as from the calculation in Eq. 11.9. d. Explain why the portfolio has a lower volatility than the average volatility of the two stocks Enter the return of this portfolio for each year in the table below: (Round to two decimal places) Year 2010 2011 2012 Portfolio 2013 2014 2015 Year Stock A Stock B 2010 -12% 27% 2011 7% 1% 2012 1% 14% 2013 -8% - 3% 2014 1% - 10% 2015 13% 35%

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