You are creating a two-risky asset portfolio. The table below listed information regarding three potential...
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Finance
You are creating a two-risky asset portfolio. The table below listed information regarding three potential candidates. If you have already decided to invest in Asset 1, which of Asset 2 and Asset 3 should you pick to compete your portfolio so that your portfolio has a better risk-return tradeoff?
Asset 1
Asset 2
Asset 3
Mean
10%
16%
16%
Standard Deviation
12%
20%
20%
Correlation with Asset 1
0.8
0.9
You should choose the asset whose correlation with Asset 1 is ________.
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