You have a portfolio with a standard deviation of 24% 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 30% of your money in the new stock and 70% of your money in your existing portfolio, which one should you add? Standard deviation of portfolio with stock A is ? Expected Return Standard Deviation Correlation with Your Portfolio's Returns Stock A 12 % 22 % 0.2 Stock B 12 % 17 % 0.7

You have a portfolio with a standard deviation of 24% 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 30% of your money in the new stock and 70% of your money in your existing portfolio, which one should you add? Standard deviation of portfolio with stock A is ? Expected Return Standard Deviation Correlation with Your Portfolio's Returns Stock A 12 % 22 % 0.2 Stock B 12 % 17 % 0.7

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 4P: An analyst has modeled the stock of a company using the Fama-French three-factor model. The market...

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