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Consider the three assets, HVN, QAN and Rio. All three assets have the same correlation with eachother of 0.1. HVN has an expected return of

Consider the three assets, HVN, QAN and Rio. All three assets have the same correlation with eachother of 0.1. HVN has an expected return of 5% and a standard deviation of 6%. QAN has an expected return of 7% and a standard deviation of 8%. RIO has an expected return of 8% and a standard deviation of 10%. Which of the following combinations of stocks will provide the best risk-return outcome for a risk-averse investor?

A - RIO

B - RIO and HVN

C - RIO and QAN

D - RIO, QAN and HVN

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