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Use the table for the question(s) below. Consider the following expected returns, volatilities, and correlations: Expected Return 14% 44% 23% Stock Duke Energy Microsoft Wal-Mart
Use the table for the question(s) below. Consider the following expected returns, volatilities, and correlations: Expected Return 14% 44% 23% Stock Duke Energy Microsoft Wal-Mart Standard Deviation 6% 24% 14% Correlation with Duke Energy 1.0 Correlation with Microsoft - 1.0 1.0 0.7 Correlation with Wal-Mart 0.0 0.7 1.0 - 1.0 0.0 Which of the following combinations of two stocks would give you the biggest reduction in risk? O A. Microsoft and Duke Energy O B. Duke Energy and Wal-Mart O C. Wal-Mart and Microsoft OD. No combination will reduce risk
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