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You have a portfolio with a standard deviation of 28% and an expected return of 16%. You are considering adding one of the two stocks
You have a portfolio with a standard deviation of 28% 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 20% of your money in the new stock and 80% of your money in your existing portfolio, which one should you add? \begin{tabular}{lccc} \hline & ExpectedReturn & StandardDeviation & CorrelationwithYourPortfoliosReturns \\ \hline Stock A & 12% & 21% & 0.4 \\ Stock B & 12% & 20% & 0.5 \\ \hline \end{tabular}
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