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

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You have a portfolio with a standard deviation of 27% and an expected retum of 16%. You are considering adding one of the two stocks in the following table athar 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? dy adi Expected Return 16% 16% Standard Deviation 24% 18% Correlation with Your Portfolio's Returns 0.3 0.7 Stock A Stock B -ars Multi Finar Standard deviation of the portfolio with stock is % Round to two decimal places) Standard deviation of the portfolio with stock 8% (Round to two decimal places) Which stock should you add and why? (Select the best choice below) O A Add A because the portfolio is less risky When A is added. Dyna OB. Add because the portfolio is less risky when is added OC. Add either one because both portfolios are equally risky Chap Mode

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