Stock A has an expected return of 12% and a standard deviation of 35%. Stock B has an expected return of and a standard deviation of 65%. The correlation coefficient between Stocks A and B is 0.2. What are the ex return and standard deviation of a portfolio invested 25% in Stock A and 75% in Stock B? Do not round intermediate calculations. Round your answers to two decimal places. Expected return: 50.62 %

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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.