Question: a highly risk averse investor is considering adding one additional stock to three stock portfolio to form a four stock portfolio. the three stocks currenntly
a highly risk averse investor is considering adding one additional stock to three stock portfolio to form a four stock portfolio. the three stocks currenntly held all have b and a perfect positive correlation with the market. potential new stocks a and b both have expected returns of and both are equally correlated with the market with r stock a SD is and stock b SD is
which stock should this investor add to his or her portfolio
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