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Your client has $104,000 invested in stock A. She would like to build a two-stock portfolio by investing another $104,000 in either stock B or

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Your client has $104,000 invested in stock A. She would like to build a two-stock portfolio by investing another $104,000 in either stock B or C. She wants a portfolio with an expected return of at least 15.0% 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 48% 39% 39% 1.00 0.19 0.31 A 16% 14% 14%

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