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

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

Part C)Which stock should you add and why?(Select the best choice below.)

A. Add Upper A because the portfolio is less risky when Upper A is added. Add A because the portfolio is less risky when A is added.

B. Add Upper B because the portfolio is less risky when Upper B is added. Add B because the portfolio is less risky when B is added.

C. Add either one because both portfolios are equally risky.

You have a portfolio with a standard deviation of 23% and an expected return of 18%. 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? Expected Return 12% 12% Standard Deviation 23% 20% Correlation with Your Portfolio's Returns 0.4 0.6 Stock A Stock B