Question: You are advising a client on which stocks to include in their portfolio. The client currently has an equally weighted portfolio consisting of stock in

You are advising a client on which stocks to include in their portfolio. The client currently has an equally weighted portfolio consisting of stock in Delta airlines, Southwest airlines, Amazon inc, and Apple computers. They are considering buying stock in one of the following firms, American Airlines, Microsoft inc, and Coca-Cola.

If you had to advise the client to pick one and only one of the stocks, which would you advise them to purchase, if you wanted to improve the risk-return characteristics of their portfolio?

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