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Assume ABC Are All Positively Correlated

Question 9

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Assume ABC are all positively correlated.A fourth stock is being considered for addition to the portfolio,either stock D or stock E.Both D and E have expected returns of 12%.If stock D is positively correlated with ABC and E is negatively correlated with ABC,which stock should be added to the portfolio? Why?

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Add stock E.The expected retur...

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