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You have a portfolio with a standard deviation of 50% and an expected return of 10%. You are considering adding one of the three stocks
You have a portfolio with a standard deviation of 50% and an expected return of 10%. You are considering adding one of the three stocks in the following table. After adding the stock, you will have 40% of your money in the new stock and 60% of your money in your existing portfolio. Stock Expected Standard Correlation with Return Deviation your portfolio return 18% 25% 0.75 18% 40% 0.60 18% 20% 0.50 a. If you were to choose only between stocks A and B, which one should you select? b. If you were to choose between A, B and C, which one should you select? Provide a typed answer to the question showing your work (formulas with inputs and/or explanations). Activ Go to Use the following notation when typing your answer: Asterisk (*) = multiplication
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