The expected return of the portfolio with stock B is % (Round to one decimal place.)

The expected return of the portfolio with stock C is % (Round to one decimal place.)

The standard deviation of the portfolio with stock B is %. (Round to one decimal place.)

The standard deviation of the portfolio with stock C is %(Round to one decimal place.)

Which stock would you advise your client to choose because it will produce the portfolio with the lower standard deviation.

Your client has $95,000 invested in stock A. She would like to build a two-stock portfolio by investing another $95,000 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? A Expected Return 17% 12% 12% Standard Deviation 46% 37% 37% Correlation with A 1.00 0.19 0.32 B C