Your client has

$101,000

invested in stock A. She would like to build a two-stock portfolio by investing another

$101,000

in either stock B or C. She wants a portfolio with an expected return of at least

14.5%

and as low a risk as possible, but the standard deviation must be no more than 40%. What do you advise her to do, and what will be the portfolio expected return and standard deviation?

	Expected Return	Standard Deviation	Correlation with A
A	15%	45%	1.00
B	14%	39%	0.12
C	14%	39%	0.32

Question content area bottom

Part 1

The expected return of the portfolio with stock B is

enter your response here%.

(Round to one decimal place.)

The variance of the portfolio with stock B is:

The variance of the portfolio with stock C is

The variance of the portfolio with stock B is

The variance of the portfolio with stock C is