Question
You have a portfolio with a standard deviation of and an expected return of 24% and an expected return of 20%. You are considering adding
You have a portfolio with a standard deviation of and an expected return of 24% 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 25% of your money in the new stock and 75% of your money in your existing portfolio, which one should you add? Standard deviation of the portfolio with stock A is__? Standard deviation of the portfolio with stock B is__?
Expected Return Standard Deviation Correlation with Your Portfolio's Returns
Stock A 16% 26% 0.3
Stock B 16% 20% 0.6
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started