The following table provides historical annual returns of two stocks A and B. An investor would like to create of portfo

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The following table provides historical annual returns of two
stocks A and B.
An investor would like to create of portfolio consisting of
30% of stock A and 70% of stock B.
1. Calculate the average portfolio return.
The average portfolio return is equal to ?
2. Calculate the variance of the portfolio.
The variance is equal to: ?
Note: In question 2, include 4 decimal points (0.0121,
0.0244...)
3. Calculate the portfolio risk in percentage terms.
The portfolio risk is equal to ?
Note: In question 3, include two decimal points
4. Did the creation of a portfolio reduce the investment risk?
Explain why in the reason box.