tate probability Return on A RETURN ON B POOR 40% -0.06 -0.09 NORMAL 35% 0.16 0.14 GOOD 25% 0.2 0.3 Weight a Weight b .4 .6 what is the return of stock a Answer for part 1 what is the return of stock b Answer for part 2 what is the standard deviation on stock a? Answer for part 3 what is the standard deviation on stock b? Answer for part 4 what is the coefficients of variation on stock a? Answer for part 5 what is the return of the portfolio? Answer for part 6 what is the covariance between a and b ? Answer for part 7 what is the correlation Answer for part 8 what is the standard deviation of the portfolio Answer for part 9

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Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.