Now you invest in a portfolio with the beta of 0.15 and the standard deviation of 1.5. You plan to use 50% of your current investment in the portfolio to buy Luther's stocks. Given that the correlation coefficient between Luther's stocks and your portfolio is -1. 

Compare risk-return situation of your current portfolio with the one of the portfolio including Luther's stocks and determine whether to buy Luther's stocks or not?

Answer rating: 100% (QA)

To determine whether to buy Luthers stocks or not we need to compare the riskreturn situation of you... View the full answer