An investor holds a porfolio of stocks and is consider in investing in the DBB Company. The firm's prospects look neutral and you estimate the following probability distribution of possible returns.
Returns on DVI P Returns On DBB
-5% 0.10 -40%
3% 0.20 -10%
8% 0.40 20%
10% 0.20 32%
12% 0.10 45%
How much is the coefficient of variation for the new portfolio?
Do you consider this portfolio more or less risky than the individual stocks?