The stock will boost the portfolios expected return to 20


A portfolio with a 25% standard deviation generated a return of 15% last year when T-bills were paying 4.5%. You are considering adding one more stock to your portfolio, the stock will boost the portfolio’s expected return to 20% while also increases the standard deviation to 30%. Should you add the stock? Why or why not?

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Financial Management: The stock will boost the portfolios expected return to 20
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