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Your client has $105,000 invested in stock A. She would like to build a two-stock portfolio by investing another $105,000 in either stock B or

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Your client has $105,000 invested in stock A. She would like to build a two-stock portfolio by investing another $105,000 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 retum and standard deviation? Expected Retur 17% 1296 12% Standard Deviation 47% 40% 40% Correlation with A 1.00 0.13 0.34 The expected return of the portfolio with stock B is % (Round to one decimal place. The expected return of the portfolio with stock C is The standard deviation of the portfolio with stock B is The standard deviation of the portfolio with stock C is%. (Round to one decimal place.) (Select from the drop-down menu.) You would advise your client to choose Round to one decimal place.) Round to one decimal place.) V because it will produce the portfolio with the lower standard deviation

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