Question: Use the table for the question(s) below. Consider the following expected returns, volatilities, and correlations: Expected Standard Correlation with Correlation with Correlation with Stock Return

 Use the table for the question(s) below. Consider the following expected

Use the table for the question(s) below. Consider the following expected returns, volatilities, and correlations: Expected Standard Correlation with Correlation with Correlation with Stock Return Deviation Duke Energy Microsoft Wal-Mart Duke Energy 14% 6% 1.0 -- 1.0 0.0 Microsoft 44% 24% - 1.0 0.7 Wal-Mart 23% 14% 0.0 0.7 1.0 Which of the following combinations of two stocks would give you the biggest reduction in risk? 1.0 A. Wal-Mart and Microsoft B. Duke Energy and Wal-Mart c. Microsoft and Duke Energy D. No combination will reduce risk

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