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ent has $98,000 invested in stock A. She would like to build a two-stock portfolio by investing ock B or C. She wants a portfolio with an expected return of at least 14.0% and as low a ris d deviation must be no more than 40%. What do you advise her to do, and what will be the nd standard deviation? A B C Expected Return 16% 12% 12% Standard Deviation 50% 38% 38% Correlation with A 1.00 0.13 0.27

ent has $98,000 invested in stock A. She would like to build a two-stock portfolio by investing ock B or C. She wants a portfolio with an expected return of at least 14.0% and as low a ris d deviation must be no more than 40%. What do you advise her to do, and what will be the nd standard deviation? A B C Expected Return 16% 12% 12% Standard Deviation 50% 38% 38% Correlation with A 1.00 0.13 0.27

Essentials Of Investments
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
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please answer the expected return of the portfolio (%) with stocks A, B, C. Round to one decimal place.
Your client has $98,000 invested in stock A. She would like to build a two-stock portfolio by investing another $98,000 in either stock B or C. She wants a portfolio with an expected return of at least 14.0% and as low a risk as possible, but the standard deviation must be no more than 40%. What do you advise her to do, and what will be the portfolio expected return and standard deviation? A B C Expected Return 16% 12% 12% Standard Deviation 50% 38% 38% Correlation with A 1.00 0.13 0.27 The expected return of the portfolio with stock B is%. (Round to one decimal place.)
Transcribed Image Text:Your client has $98,000 invested in stock A. She would like to build a two-stock portfolio by investing another $98,000 in either stock B or C. She wants a portfolio with an expected return of at least 14.0% and as low a risk as possible, but the standard deviation must be no more than 40%. What do you advise her to do, and what will be the portfolio expected return and standard deviation? A B C Expected Return 16% 12% 12% Standard Deviation 50% 38% 38% Correlation with A 1.00 0.13 0.27 The expected return of the portfolio with stock B is%. (Round to one decimal place.)
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