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Your client has $90,000 invested in stock A. She would like to build a two-stock portfolio by investing another 509,000 in either stock Bor C.

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Your client has $90,000 invested in stock A. She would like to build a two-stock portfolio by investing another 509,000 in either stock Bor C. She wants a portfolio with an expected return of at least 15.5% and as low are 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 A B 17% 14% 14% Standard Deviation 47% 40% 40% Correlation with A 100 0.11 0.29 The expected return of the portfolio with stock Bis% (Round to ono 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 is (Round to one decimal place) The standard deviation of the portfolio with stock is % (Round to onn 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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