Stock A has a volatility of 65% and a correlation of 10% with your current portfolio. Stock
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Stock A has a volatility of 65% and a correlation of 10% with your current portfolio. Stock B has a volatility of 30% and a correlation of 25% with your current portfolio. You currently hold both stocks. Which will increase the volatility of your portfolio:
(i) Selling a small amount of stock B and investing the proceeds in stock A, or (ii) Selling a small amount of stock A and investing the proceeds in stock B?
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