Question: Stocks A, B, and C have the same expected return and standard deviation. The correlations between the returns on these stocks are shown in the

Stocks A, B, and C have the same expected return and standard deviation. The correlations between the returns on these stocks are shown in the following table:

Stock

Stock A

Stock B

Stock C

Stock A

+1.0

Stock B

+0.9

+1.0

Stock C

+0.1

-0.4

+1.0

Given these correlations, the portfolio constructed from these stocks having the lowest risk is a portfolio:

	A.	Equally invested in stocks A and B.
	B.	Equally invested in stocks A and C.
	C.	Equally invested in stocks B and C
	D.	Totally invested in Stock C.

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