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Standard deviation of the portfolio with share

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Reference no: EM133072212

You have a portfolio with a standard deviation of 28% and an expected return of 19%. You are considering adding one of the two shares in the table below. If after adding the shares you will have 25% of your money in the new shares and 75% of your money in your existing? portfolio, which one should you? add?

 

Expected return

Standard deviation

Correlation with your? portfolio's returns

Share A

15?%

26?%

0.4

Share B

15?%

17?%

0.6

Standard deviation of the portfolio with share A is ()?%. ?(Round to two decimal? places.)

Standard deviation of the portfolio with share B is ()?%. ?(Round to two decimal? places.) 

?(Select the best choice? below.) Which share should you add and? why?

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

Reference no: EM133072212

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