Risk V ersus Re t u r n: Choosing an E

Risk V ersus Re t u r n: Choosing an E f ficient P o r t f olio Suppose Ford Motor stock has an expected return of 20% and a volatility of 40% and Molson Coors Brewing has an expected return of 10% and a volatility of 30%. If the two stocks are uncorrelated a. What is the expected return and volatility of an equally weighted portfolio of the two stocks? b. Given your answer to part a is investing all of your money in Molson Coors stock an efficient portfolio of these two stocks? c. Is investing all of your money in Ford Motor an efficient portfolio of these two stocks?

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