You have a portfolio with a standard deviation of 29% and an expected return of 19%. 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% ofyour money in your existing portfolio, which one should you add?ExpectedReturnStandardCorrelation withDeviationYour Portfolio's ReturnsStock A16%23%0.4Stock B16%16%0.5Standard 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.)A. Add B because the portfolio is less risky when B is added.B. Add A since the portfolio is less risky when A is added.C. Add either one because both portfolios are equally risky.

given, rp=19%σp=29%wp=0.8wstock=0.2

You have a portfolio with a standard deviation of 29% and an expected return of 19%. 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? Expected Return Standard Deviation Correlation with Your Portfolio's Returns Stock A 16% 16% 23% 0.4 Stock B 16% 0.5 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.) O A. Add B because the portfolio is less risky when B is added. O B. Add A since the portfolio is less risky when A is added. O C. Add either one because both portfolios are equally risky.

You have a portfolio with a standard deviation of 29% and an expected return of 19%. 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? Expected Return Standard Deviation Correlation with Your Portfolio's Returns Stock A 16% 16% 23% 0.4 Stock B 16% 0.5 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.) O A. Add B because the portfolio is less risky when B is added. O B. Add A since the portfolio is less risky when A is added. O C. Add either one because both portfolios are equally risky.

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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You manage a risky portfolio with an expected rate of return of 13% and a standard deviation of 34%. The T-bill rate is 2%. Stock A Stock B Stock C 45% 32% 23% Suppose that your client decides to invest in your portfolio a proportion y of the total investment budget so that the overall portfolio will have an expected rate of return of 11%. Required: a. What is the proportion y? b. What are your client's investment proportions in your three stocks and the T-bill fund? c. What is the standard deviation of the rate of return on your client's portfolio? Complete this question by entering your answers in the tabs below. Required A Required B Required C What is the proportion y? Note: Round your answer to the nearest whole number. Proportion y %

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