Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. you have a portfolio with a standard deviation of

You have a portfolio with a standard deviation of 28% and an expected return of...

70.2K

Verified Solution

Question

Finance

image

You have a portfolio with a standard deviation of 28% 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 13% 13% Standard Deviation 23% 17% Correlation with Your Portfolio's Returns 0.3 0.7 Stock A Stock B Standard deviation of the portfolio with stock A is 24.18 %. (Round to two decimal places.) Standard deviation of the portfolio with stock B is 24.90 %. (Round to two decimal places.) Which stock should you add and why? (Select the best choice below.) A. Add A because the portfolio is less risky when A is added. B. Add B because the portfolio is less risky when B is added. O C. Add either one because both portfolios are equally risky

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Describe what psychologists mean when they say that attention and working memory have a limited capacity....

Psychology
Q

After you graduate from CSU, you get a job with the Dihedral Group earning $1,890...

Basic Math
Q

Find exact values of the six trigonometric functions of each angle. Rationalize denomi-nators when applicable....

Basic Math
Q

12 Find the infinite sum if it exists for this geometric series 2 0 5...

Algebra
Q

The condensed product-line income statement for Rhinebeck Company for the month of October is as...

Accounting
Q

Required information [The following information applies to the questions displayed below.] The following data were...

Accounting
Q

Which of the following is TRUE when making decisions between two alternatives? Check all that...

Accounting
Q

On January 1, Talent Company purchased as a short-term investment a $1,000, 8% bond for...

Accounting
Q

Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for...

Accounting
Q

Required Information Use the following Information for the Quick Study below. The following information applies...

Accounting
Q

You have backtested the following strategies. Based on the performance evaluation, which of these strategies...

Finance
Q

Exercise 10-10 (Part Level Submission) Whitmore Company issued $534,500 of 5-year, 9% bonds at 95...

Accounting