Consider two stocks, A and B, whose returns in a boom and a recession are given below. Stock A: recession (-15%), boom (+20%). Stock B: recession (+10%), boom (-2%). Suppose that there is a 10% chance...

Consider two stocks, A and B, whose returns in a boom and a recession are given  below. Stock A: recession (-15%), boom (+20%). Stock B: recession (+10%), boom (-2%). Suppose that there is a 10% chance of a recession next year. 25.53% should be allocated in stock A and 74.47% in stock B to minimize the risk. Are you able to perfectly eliminate your risk?