Question
Fareeda is looking to add two more stocks to her portfolio, she is deciding between the following stocks (3 marks): Covariances Citadel Capital CIB Delta
- Fareeda is looking to add two more stocks to her portfolio, she is deciding between the following stocks (3 marks):
| Covariances | Citadel Capital | CIB | Delta Sugar | Egyptian Media Prdn. | Orascom Construction | Ezz Steel |
| Citadel Capital |
| +0.556 | -0.541 | -0.315 | +0.004 | +0.108 |
| CIB | +0.556 |
| 0 | -0.263 | +0.635 | +0.333 |
| Delta Sugar | -0.541 | 0 |
| +0.021 | +0.179 | +0.224 |
| Egyptian Media Prdn. | -0.315 | -0.263 | +0.021 |
| +0.024 | +0.098 |
| Orascom Construction | +0.004 | +0.635 | +0.179 | +0.024 |
| +0.345 |
| Ezz Steel | +0.108 | +0.333 | +0.224 | +0.098 | +0.345 |
|
Given the above data can you give recommendations to Fareeda on which pairs of stocks she should include and which she should not. Explain why and how she can reach to the final decision of which two stocks she should add to her portfolio.
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Accounting Information For Business Decisions
Authors: Billie Cunningham, Loren A. Nikolai, John Bazley, Marie Kavanagh, Geoff Slaughter, Sharelle Simmons
2nd Edition
0170253708, 978-0170253703
