You have a portfolio with a standard deviation of

25%

and an expected return of

17%.

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?

	Expected Return	Standard Deviation	Correlation with Your Portfolio's Returns
Stock A	13%	25%	0.3
Stock B	13%	19%	0.6

Standard deviation of the portfolio with stock A is

enter your response here%.

(Round to two decimal places.)

Part 2

Standard deviation of the portfolio with stock B is

enter your response here%.

(Round to two decimal places.)

Part 3

Which stock should you add and why?(Select the best choice below.)

A. Add Upper B because the portfolio is less risky when Upper B is added.

B. Add Upper A because the portfolio is less risky when Upper A is added.

C. Add either one because both portfolios are equally risky.