You Own Stock a with a Standard Deviation of 48

question 19

Multiple Choice

You own Stock A with a standard deviation of 48% and Stock B with a standard deviation of 35%. As you add more Stock A to your portfolio, the standard deviation of your portfolio will:

• A) always increase.
• B) always decrease.
• C) remain the same.
• D) It depends on the initial weights and the correlation.
• E) Insufficient information.