As a manager of the 221 Fund, a well-diversifiedportfolio, you have been given the followinginformation for 4 potential new stocks to add to the221 Fund.Expected Required Coefficient ofReturnReturnVariation (CV)12%13%25%24%Cosmo-Cola 17%18%Da Bares20%25%EnterprisesStockAcme, Inc.Bubba Co.1.01.50.91.4Which stock(s) would you add to the well-diversified221 Fund portfolio based on the information given?

In portfolio managment investment is spread over the number of stocks so as to reduce risk and…

Answered: As a manager of the 221 Fund, a…

As a manager of the 221 Fund, a well-diversified portfolio, you have been given the following information for 4 potential new stocks to add to the 221 Fund. Stock Expected Required Coefficient of

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

As a manager of the 221 Fund, a well-diversified
portfolio, you have been given the following
information for 4 potential new stocks to add to the
221 Fund.
Expected Required Coefficient of
Return
Return
Variation (CV)
12%
13%
25%
24%
Cosmo-Cola 17%
18%
Da Bares
20%
25%
Enterprises
Stock
Acme, Inc.
Bubba Co.
1.0
1.5
0.9
1.4
Which stock(s) would you add to the well-diversified
221 Fund portfolio based on the information given?

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