Idaho Slopes (IS) and Dakota Steppes (DS) Are Both Seasonal

Multiple Choice

Idaho Slopes (IS) and Dakota Steppes (DS) are both seasonal businesses. IS is a downhill skiing facility, while DS is a tour company that specializes in walking tours and camping. The equally likely returns on each company over the next year is expected to be: If IS and DS are combined in a portfolio with 50% invested in each, the expected return and risk would be:

A) 5.625%; 37.2%.
B) 4.5%; 5.48%.
C) 8.0%; 8.2%.
D) 5.0%; 0%.
E) 4.5%; 0%.