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You have a portfolio with a standard deviation of 27% and an expected return of 16%. You are considering adding one of the two stocks

You have a portfolio with a standard deviation of 27% and an expected return of 16%. 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 existingportfolio, which one should youadd?

Stock A: expected returns standard deviation correlation

16% 26% .3

26%

Stock B:

16% 17% .5

17%

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