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You have a portfolio with a standard deviation of 25% and an expected return of 20%. You are considering adding one of the two stocks
You have a portfolio with a standard deviation of 25% and an expected return of 20%. You are considering adding one of the two stocks in the following table. If after adding the stock you will have 25% of your money in the new stock and 75% of your money in your existing portfolio, which one should you add?
Expected Return | standard deviation | Correlation with Your Portfolio's Returns | |
stock a | 15% | 24% | 0.2 |
stock b | 15% | 17% | 0.6 |
Standard deviation of the portfolio with stock A is %.(Round to two decimal places.)
Standard deviation of the portfolio with stock B is %.(Round to two decimal places.)
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