You have a portfolio with a standard deviation of 20% and an expected return of 18%. You are considering adding one the two stocks in the following table. If after adding the stock you will have 30% of your money in the new stock and 70% of your money in your existing portfolio, which one should you add? Stock A Stock B Expected Return 13% 13% Standard Deviation 23% 18% Correlation with Your Portfolio's Returns 0.3 0.7 Standard deviation of the portfolio with stock A is%. (Round to two decimal places.) Standard deviation of the portfolio with stock B is%. (Round to two decimal places.) Which stock should you add and why? (Select the best choice below.) because the portfolio is less risky when B is added.

You have a portfolio with a standard deviation of 20% and an expected return of 18%. You are considering adding one the two stocks in the following table. If after adding the stock you will have 30% of your money in the new stock and 70% of your money in your existing portfolio, which one should you add? Stock A Stock B Expected Return 13% 13% Standard Deviation 23% 18% Correlation with Your Portfolio's Returns 0.3 0.7 Standard deviation of the portfolio with stock A is%. (Round to two decimal places.) Standard deviation of the portfolio with stock B is%. (Round to two decimal places.) Which stock should you add and why? (Select the best choice below.) because the portfolio is less risky when B is added.

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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also do deviation of stock b please
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