The correlation coefficients between pairs of stocks is as follows:
Corr (A, B) = .85; Corr (A, C) = .60; Corr (A, D) =.45
Each stock has an expected return of 8 percent and a standard deviation of 20 percent. If you’re entire portfolio now comprises stock A and you can add only one more, which of the following would you choose, and why?
d. Need more data