You have a portfolio with a standard deviation of 30% and an expected return of 18%. 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? Stock A Stock B Expected Return 15% 15% Standard Deviation 25% 20% Correlation with Your Portfolio's Returns 0.2 0.6 C Standard deviation of the portfolio with stock A is%. (Round to two decimal places.)
You have a portfolio with a standard deviation of 30% and an expected return of 18%. 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? Stock A Stock B Expected Return 15% 15% Standard Deviation 25% 20% Correlation with Your Portfolio's Returns 0.2 0.6 C 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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Transcribed Image Text:You have a portfolio with a standard deviation of 30% and an expected return of 18%. 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?
Stock A
Stock B
Expected
Return
15%
15%
Standard
Deviation
25%
20%
Correlation with
Your Portfolio's Returns
0.2
0.6
...
Standard deviation of the portfolio with stock A is%. (Round to two decimal places.)
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