You have a portfolio with a standard deviation of 25% and an expected return of 18%. You are consi the following table. If after adding the stock you will have 20% of your money in the new stock and 80 existing portfolio, which one should you add? Stock A Stock B Expected Return 14% 14% Standard Deviation 21% 17% Correlation with Your Portfolio's Returns 0.2 0.6 Standard deviation of the portfolio with stock A is%. (Round to two decimal places.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 25P
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also do deviation of stock b please

You have a portfolio with a standard deviation of 25% and an expected return of 18%. You are considering adding one of the two stocks in
the following table. If after adding the stock you will have 20% of your money in the new stock and 80% of your money in your
existing portfolio, which one should you add?
Stock A
Stock B
Expected
Return
14%
14%
Standard
Deviation
21%
17%
Standard deviation of the portfolio with stock A is
Correlation with
Your Portfolio's Returns
0.2
0.6
%. (Round to two decimal places.)
Transcribed Image Text:You have a portfolio with a standard deviation of 25% and an expected return of 18%. You are considering adding one of the two stocks in the following table. If after adding the stock you will have 20% of your money in the new stock and 80% of your money in your existing portfolio, which one should you add? Stock A Stock B Expected Return 14% 14% Standard Deviation 21% 17% Standard deviation of the portfolio with stock A is Correlation with Your Portfolio's Returns 0.2 0.6 %. (Round to two decimal places.)
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