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You have a portfolio with a standard deviation of 24 % and an expected return of 18 % You are considering adding one of the
You have a portfolio with a standard deviation of
24 %
and an expected return of
18 %
You are considering adding one of the two stocks in the following table. If after adding the stock you will have
20 %
of your money in the new stock and
80 %
of your money in your existing portfolio, which one should you add?
Expected Return | Standard Deviation | Correlation with Your Portfolio's Returns | |
Stock A | 13 | 24 | 0.2 |
Stock B | 13 | 18 | 0.7 |
1. Standard deviation of the portfolio with stock A is?
(Round to two decimal places.)
2. Standard deviation of the portfolio with stock B is?
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