You have a portfolio with a standard deviation of 26 % and an expected return of 17%
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Question:
You have a portfolio with a standard deviation of 26 % and an expected return of 17% . You are considering adding one of the two stocks. If after adding the stock you will have 25% of your money in the new stock and of your money in your existing portfolio, which one should you add?
Stock A expected return 14% standard deviation 22% Correlation with Your Portfolio's Returns 0.2
Stock B expected return 14% standard deviation 17% Correlation with Your Portfolio's Returns 0.5
Standard deviation of the portfolio with stock A is (Round to two decimal places.)
Part 2 Standard deviation of the portfolio with stock B is Round to two decimal places.)
Part 3 Which stock should you add and why?
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