Attached are 2 excel spreadsheets that are supporting documents to the questions provided. Please provide 2 additional sources in support for requested 1 page paper. Questions: 1. Discuss how understanding risk and returns will impact this decision. Give credit to any sources you use to support your statements. 2. Stock A has an expected return of 10 percent and a standard deviation of 5 percent. Stock B has an expected return of 15 percent and a standard deviation of 20 percent. The correlation between the two shares is 0.25. You can invest risk free at a 5 percent interest rate. What is the standard deviation for a portfolio with weights of 25 percent in A, 25 percent in B, and 50 percent in the risk-free asset? 3. McCormick's retirement fund company manages a risky portfolio for their employees with an expected rate of return of 17 percent and a standard deviation of 27 percent. The treasury-bill rate is 7 percent. You chose to invest 70 percent of a portfolio in McCormick's retirement fund and 30 percent in a T-bill money market fund. What is the expected value and standard deviation of the rate of return on your portfolio?
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