Suppose that you have a portfolio equally weighed with Wal-Mart and Ford stock--$25,000 of Ford and $25,000 of Wal-Mart. Also assume that you have an additional $25,000 to invest. Recommend a stock buy (one stock) using all of the cash that reduces risk. Demonstrate that this purchase is likely to reduce risk. Volatility? Graph the risk premium for your new purchase over the last 10 years.

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