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The expected return of the portfolio with stock B is ___? (round to one decimal) The expected return of the portfolio with stock C is
The expected return of the portfolio with stock B is ___? (round to one decimal)
The expected return of the portfolio with stock C is ___? (round to one decimal)
The standard deviation of the portfolio with stock B is ___? (round to one decimal)
The standard deviation of the portfolio with stock C is ___? (round to one decimal)
You would advise your client to choose stock B or C?
Your client has $104,000 invested in stock A. She would like to build a two-stock portfolio by investing another $104,000 in either stock B or C. She wants a portfolio with an expected return of at least 14.5% and as low a risk as possible, but the standard deviation must be no more than 40%. What do you advise her to do, and what will be the portfolio expected return and standard deviation? Coo Expected Return 16% 13% 13% Standard Deviation 49% 40% 40% Correlation with A 1.00 0.13 0.29
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