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Your client has 106,000 invested in stock A. She would like to build a two-stock portfolio by investing another $98.000 in either stock or C.

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Your client has 106,000 invested in stock A. She would like to build a two-stock portfolio by investing another $98.000 in either stock or C. She wants a portfolio with an expected return of at least 15.5% 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 expected retum and standard deviation? Correlation with A Expected Return 17% Standard Deviation 47% A 1.00 0.14 B 14% 40% C 14% 40% 0.26 The expected return of the portfolio with stock Bis%. (Round to one decimal place) The expected retum of the portfolio with stock C is. (Round to one decimal place) The standard deviation of the portfolio with stock B is. (Round to one decimal place). The standard deviation of the portfolio with stock Cie. (Round to one decimal place) (Select from the drop-down menu) You would advise your client to choose because it will produce the portfolio with the lower standard deviation

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