Consider the characteristics of the following three stocks   Expected Return     Standard Deviation   Pic Image 19 %   25 % Tax Help 18     25   Warm Wear 32     28   The correlation between Pic Image and Tax Help is 0.78. The correlation between Pic Image and Warm Wear is −0.21. The correlation between Tax Help and Warm Wear is −0.17.Select only two stocks for your portfolio based on expected returns and correlation. A.  Tax Help and Warm Wear B.   Pic Image and Warm Wear   C.  Tax Help and Pic Image         :

Question

Consider the characteristics of the following three stocks

  Expected Return     Standard Deviation  
Pic Image 19 %   25 %
Tax Help 18     25  
Warm Wear 32     28  


The correlation between Pic Image and Tax Help is 0.78. The correlation between Pic Image and Warm Wear is −0.21. The correlation between Tax Help and Warm Wear is −0.17.

Select only two stocks for your portfolio based on expected returns and correlation.

A.  Tax Help and Warm Wear

B.   Pic Image and Warm Wear
 
C.  Tax Help and Pic Image

 

 
 
 

:

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