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You have a portfolio with a standard deviation of 30% and an expected return of 20%. You are considering adding one of the two stocks
You have a portfolio with a standard deviation of 30% and an expected return of 20%. 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? Expected Standard Correlation with Your Portfolio's Returns Return Deviation 12% 24% 12% 16% Stock A Stock B 0.2 0.7 Standard deviation of the portfolio with stock A is 18.4%. (Round to two decimal places.)
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