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highlight answers You have a portfolio with a standard deviation of 22% and an expected return of 15%. You are considering adding one of the
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You have a portfolio with a standard deviation of 22% and an expected return of 15%. You are considering adding one of the two stocks in the following table. If after adding the stock you will have 30% of your money in the new stock and 70% of your money in your existing portfolio, which one should you add? Stock A Stock B Expected Return 12% 12% Standard Deviation 22% 19% Correlation with Your Portfolio's Returns 0.3 0.5 Standard deviation of the portfolio with stock Ais %. (Round to two decimal places.) Standard deviation of the portfolio with stock B is %. (Round to two decimal places.) Which stock should you add and why? (Select the best choice below.) A. Add B because the portfolio is less risky when B is added. B. Add A because the portfolio is less risky when A is added. C. Add either one because both portfolios are equally risky Step by Step Solution
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