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You have a portfolio with a standard deviation of 28% and an expected return of 19%. You are considering adding one of the two stocks

You have a portfolio with a standard deviation of 28% and an expected return of 19%. You are considering adding one of the two stocks in the following table. If after adding the stock you will have 20% of your money in the new stock and80%of your money in your existing portfolio, which one should you add?

Expected

Return

Standard

Deviation

Correlation with

Your Portfolio's Returns

Stock A

16%

26%

0.3

Stock B

16%

18%

0.6

1) Standard deviation of the portfolio with stock A is _____%

2) Standard deviation of the portfolio with stock B is _____%

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