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You have research the following three stocks, Stock A : STD 20%, B =1.1; Stock B : STD 30%, B =0.9; Stock C : STD

You have research the following three stocks, Stock A : STD 20%, B =1.1; Stock B : STD 30%, B =0.9; Stock C : STD 15%, B = 1.

If you wanted to reduce the risk you held in isolation you would choose stock .

If you wanted to reduce the risk you held as part of a diversified portfolio, you would hold stock .

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