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You have a portfolio with a standard deviation of 22% and an expected return of 16%. You are considering adding one of the two stocks
You have a portfolio with a standard deviation of 22% and an expected return of 16%. You are considering adding one of the two stocks in the following table. If after adding the stock you will have 30% of your money in the new stock and 70% of your money in your existing portfolio, which one should you add? Correlation with Your Portfolio's Returns Expected Return 16% 16% Stock A Stock B Standard Deviation 25% 17% 0.4 0.6 Standard deviation of the portfolio with stock Ais/ %. (Round to two decimal places.) Standard deviation of the portfolio with stock B is %. (Round to two decimal places.)
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