Portfolio AB was created by investing in a combination of Stocks A and B. Stock A has a beta of 1.2 and a standard deviation of 25%. Stock B has a beta of 1.4 and a standard deviation of 20%. Portfolio AB has a beta of 1.25 and a standard deviation of 18%. Which of the following statements is CORRECT?
A. Portfolio AB has the same amount of money invested in each of the two stocks.
B. Stock A has more market risk than Stock B but less stand-alone risk.
C. Portfolio AB has more money invested in Stock A than in Stock B.
D. Stock A has more market risk than Portfolio AB.
E. Portfolio AB has more money invested in Stock B than in Stock A.
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Portfolio AB was created by investing in a combination of Stocks A and B. Stock A has a beta of 1.2...
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