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You have a portfolio with a standard deviation of 2 0 % and an expected return of 1 8 % . You are considering adding
You have a portfolio with a standard deviation of and an expected return of You are considering adding
one of the two stocks in the following table. If after adding the stock you will have of your money in the new
stock and of your money in your existing portfolio, which one should you add?
Standard deviation of the portfolio with stock is
Round to two decimal places.
Standard deviation of the portfolio with stock B is
Round to two decimal places.
Which stock should you add and why? Select the best choice below.
A Add because the portfolio is less risky when is added.
B Add A because the portfolio is less risky when is added.
C Add either one because both portfolios are equally risky.
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