Which of the given portfolios has the lowest risk

Reference no: EM131812524

Question: Shares of company A are sold at$10 per share. Shares of company B are sold at$50 per share. According to a market analyst, 1 share of each company can either gain$1, with probability 0.5, or lose$1, with probability 0.5, independently of the other company. Which of the following portfolios has the lowest risk:

(a) 100 shares of A

(b) 50 shares of A + 10 shares of B

Reference no: EM131812524

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