Rodrigo is interested to add stock of Brescia Bhd into his portfolio. Brescia is a stock listed in the Bursa Malaysia and its annual average rates of return for the last five years relative to the market index are available for analysis in the Table 1. Meanwhile, the details of his current portfolio position is available in Table 2.

Table 1: Annual average rates of return

	Rates of return (%)
Year	Brescia Berhad	KLCI Index
2015	20	15
2016	5	10
2017	10	18
2018	-15	6
2019	-10	-12

Table 2: Current portfolio position

	Value (RM)	Expected return	St. Deviation	Beta
Bond of Cagliari Bhd	20,000	6%	15%	0.85
Stocks of Lecce Holdings	20,000	5%	10%	2.5
Correlation coefficient between Cagliari and Lecce is 0.45 Expected correlation coefficient between Brescia and Lecce is -0.55 Expected correlation coefficient between Brescia and Cagliari is 0.20

4. Based on Markowitzs portfolio risk calculation, would it be wise to add Brescia into the portfolio? (Hint: Compare the portfolio risk before and after the Brescia stock is added to the portfolio)