You have a portfolio with a standard deviation of 25% and an expected return of 17%. 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 24% 19% Correlation with Your Portfolio's Returns 0.4 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 25% and an expected return of 17%. 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 24% 19% Correlation with Your Portfolio's Returns 0.4 0.7 Standard deviation of the portfolio with stock A is%. (Round to two decimal places.)
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
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