2.

Standard deviation of the portfolio with stock A is _________%

Standard deviation of the portfolio with stock B is _________%

Using the data in the following table, and the fact that the correlation of A and B is 0.21, calculate the volatility (standard deviation) of a portfolio that is 70% invested in stock A and 30% invested in stock B. (Click on the following icon in order to copy its contents into a spreadsheet.) - 15% Year 2008 2009 2010 2011 2012 2013 Realized Returns Stock A Stock B 18% 9% 33% 6% 10% - 3% - 10% 2% -15% 14% 16% The standard deviation of the portfolio is %. (Round to two decimal places.) You have a portfolio with a standard deviation of 23% and an expected return of 17%. You are considering adding one of the two stocks in the following table. If after adding the stock you will have 20% of your money in the new stock and 80% of your money in your existing portfolio, which one should you add? Expected Return 13% 13% Standard Deviation 25% 20% Correlation with Your Portfolio's Returns 0.2 0.7 Stock A Stock B