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You have a portfolio with a standard deviation of 26% and an expected return of 18%. You are considering adding one of the two stocks
You have a portfolio with a standard deviation of 26% 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 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 | |
Stock A | 16% | 21% | 0.4 |
Stock B | 16% | 17% | 0.7 |
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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