Stock A has a volatility of 58% and a correlation of 27% with your current portfolio. Stock
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Stock A has a volatility of 58% and a correlation of 27% with your current portfolio. Stock B has a volatility of 97% and a correlation of 28% 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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Related Book For
Corporate Finance The Core
ISBN: 9781292158334
4th Global Edition
Authors: Jonathan Berk, Peter DeMarzo
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