1) Standard deviation of the portfolio with stock A is ___%.(Round to two decimal places.)

2) Standard deviation of the portfolio with stock B is ___%.(Round to two decimal places.)

3)Which stock should you add and why?

You have a portfolio with a standard deviation of 25% and an expected return of 20%. You are considering adding one of the two stocks in the following table. If after adding the stock you will have 25% of your money in the new stock and 75% of your money in your existing portfolio, which one should you add? Expected Return 13% 13% Standard Deviation 23% 20% Correlation with Your Portfolio's Returns 0.3 0.7 Stock A Stock B