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Your client has $98,000 invested in stock A. She would like to build a two-stock portfolio by investing another $98,000 in either stock B or

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Your client has $98,000 invested in stock A. She would like to build a two-stock portfolio by investing another $98,000 in either stock B 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 will be the portfolio expected return and standard deviation? Correlation with A A Expected Return 17% 14% 14% Standard Deviation 45% 39% 39% B 1.00 0.17 0.29 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.)

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