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You are creating a two-risky asset portfolio. The table below listed information regarding three potential candidates. If you have already decided to invest in
You are creating a two-risky asset portfolio. The table below listed information regarding three potential candidates. If you have already decided to invest in Asset 1, which of Asset 2 and Asset 3 should you pick to compete your portfolio so that your portfolio has a better risk-return tradeoff? Mean Standard Deviation Correlation with Asset 1 Asset 1 Asset 2 Asset 3 5% 18% 18% 9% 25% 25% Asset 3 Either asset; it won't make a difference Asset 2 -0.90 +0.12
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