Someone holds X stock (ABCD.JK). To minimize the risk, he wants to add another stock, He is considering to add Y (EFGH.JK) or Z (PQRS.JK). He gathers some information to help him make a decision:

	EFGH.JK	PQRS.JK
Beta	1.25	0.79
Standard Deviation	0.16	0.28
Correlation with ABCD.JK	0.555	0.155
Return	5.1%	18%

The standard deviation of ABCD.JK is 0.1 and the return of ABCD.JK is 4%. The investor wants to build an equality weighted portfolio (both 50% weight). To help him decide, please calculate:

a. The portfolios expected return of ABCD.JK and EFGH.JK

b. The portfolios expected return between ABCD.JK and PQRS.JK

c. The portfolios standard deviation between ABCD.JK and EFGH.JK

D. The portfolios standard deviation between ABCD.JK and PQRS.JK

e. Which stock should he add? DEFG.JK or PQRS.JK? Explain!