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Your client has $102,000 invested in stock A

Finance Dec 09, 2020

Your client has $102,000 invested in stock A. She would like to build a two-stock portfolio by investing another $102,000 in either stock B or C. She wants a portfolio with an expected return of at least 14.5% and as low a risk as possible, but the standard deviation must be no more than 40%. What do you advise her to do, and what will be the portfolio expected return and standard deviation? Expected Return Standard Deviation Correlation with A 15% 45% 1.00 B 14% 39% 0.14 ? 14% 39% 0.33 The expected return of the portfolio with stock B is %. (Round to one decimal place.)

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