You have a portfolio with a standard deviation of 30% and an expected return of 19%. You are considering adding one of t
Posted: Thu May 05, 2022 8:47 am
You have a portfolio with a standard deviation of
30%
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
25%
of your money in the new stock and
75%
of your money in your existing portfolio, which one should
you add?
Expected
Return
Standard
Deviation
Correlation with
Your Portfolio's Returns
Stock A
13%
25%
0.3
Stock B
13%
17%
0.7
Question content area bottom
Part 1
Standard deviation of the portfolio with stock A is
enter your response here%.
30%
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
25%
of your money in the new stock and
75%
of your money in your existing portfolio, which one should
you add?
Expected
Return
Standard
Deviation
Correlation with
Your Portfolio's Returns
Stock A
13%
25%
0.3
Stock B
13%
17%
0.7
Question content area bottom
Part 1
Standard deviation of the portfolio with stock A is
enter your response here%.