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	14%	25%	0.2
Stock B	14%	18%	0.6

Standard deviation of the portfolio with stock A is