You have a portfolio with a standard deviation of 22% and an expected return of 20%. You are considering adding one of the two stocks in the following table. If after adding the stock you will have 25% of your money in the new stock and 75% of your money in your existing portfolio, which one should you add? Stock A Stock B Expected Return 16% 16% Standard Deviation 21% 19% Correlation with Your Portfolio's Returns 02 0.7 Standard deviation of the portfolio with stock A is % (Round to two decimal places)

You have a portfolio with a standard deviation of 22% and an expected return of 20%. You are considering adding one of the two stocks in the following table. If after adding the stock you will have 25% of your money in the new stock and 75% of your money in your existing portfolio, which one should you add? Stock A Stock B Expected Return 16% 16% Standard Deviation 21% 19% Correlation with Your Portfolio's Returns 02 0.7 Standard deviation of the portfolio with stock A is % (Round to two decimal places)

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 15MC

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