Standard deviation and expected return

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Reference no: EM13951689

The stock of a technology company has an expected return of 15% and a standard deviation of 20% 10) The stock of a pharmaceutical company has an expected return of 13% and a standard deviation of 18%. A portfolio consisting of 50% invested in each stock will have an expected return of 14 % and a standard deviation (They are not perfectly positively correlated)

A) The average of 20% and 18%.

B) Less than the average of 20% and 18%.

C) The answer cannot be determined with the information given.

D) Greater than the average of 20% and 18%.

I know the answer is B but I need to know how is it calculated.

Reference no: EM13951689

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