Your client has $95,000 invested in stock A. She would like to build a two-stock portfolio by investing another $95,000 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	17%	50%	1.00
B	12%	39%	0.18
C	12%	39%	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 % (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 C is %(Round to one decimal place.)

Which stock would you advise your client to choose because it will produce the portfolio with the lower standard deviation.